Impact: Positive (agro Commodities, agro ancillary industry, Trade Balance)

Brief: Agriculture sector accounts for 14.8% in India's overall GDP and 12.6% in its overall exports. Understandably so, among its peers, India's agricultural share to overall GDP is highest. Despite this however, the sector has a miniscule footprint with a share of only 2.2% in global agro market. The government is mulling over to set up Agro Specific Zones to promote farm sector exports. These zones will be utilized in producing and processing agro commodities that is intended for exports. We believe that this move will help in increasing India's global footprint of the sector, increasing systemic efficiencies in the process.

Agriculture sector accounts for 14.8% in India's overall GDP and 12.6% in its overall exports. Understandably so, among its peers, India's agricultural share to overall GDP is highest. Despite this however, the sector has a miniscule footprint with a share of only 2.2% in global agro market. It is known that the global market size of the sector is close to $1.7 trillion in 2017 and India therefore has a huge scope to expand its agricultural exports. Also worth noting is the fact that the country's exports are predominantly oriented towards Asia region, where it sends 60% of its tradable produce. The situation relegates the Indian exporters to a lower segment of the overall value chain.

Europe and the United State, on the other hand, are the bigger markets for the agricultural commodities in the world. These two regions are destination for almost 50% (39 + 10%) of global agriculture exports and singlehandedly influence agro prices. However, strangely, they imports only 4.7% of their overall agro imports from India. Lack of global standard in the food quality is the main constraint for the Indian farm sector and accessing the world's largest markets remains farfetched.

As a remedy, Indian government has proposed bringing out a new agriculture export policy in rider to promote agro exports in an effort to double farmers' income by 2022. The government is mulling over to set up Agro Specific Zones to promote farm sector exports. These zones will be utilized in producing and processing agro commodities that is intended for exports. We believe that this move will help in increasing India's global footprint of the sector, increasing systemic efficiencies in the process.