The Indian economy has undergone a large structural shift in the last eight years and is currently the 5th largest economy in the world after overtaking the United Kingdom. Going ahead, India is expected to pip Germany in 2027 and Japan by 2029 at the current rate of growth, as per a State Bank of India NSE 0.44 % (SBI) research report.

 

The path taken by India since 2014 reveals India is likely to get the tag of 3rd largest economy in 2029, a movement of 7 places upwards since 2014 when India was ranked 10th, according to a research report from the State Bank of India's Economic Research Department. India should surpass Germany in 2027 and most likely Japan by 2029 at the current rate of growth.

 

This is a remarkable achievement by any standards, said the report, authored by Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI.

 

India, a former British colony, leapt past the UK in the final three months of 2021 to become the fifth-biggest economy. The calculation is based in US dollars, and India extended its lead in the first quarter, according to GDP figures from the International Monetary Fund.

 

India's GDP growth in Q1 FY23 was 13.5 per cent. At this rate, India is likely to be the fastest growing economy in the current fiscal. Interestingly, even as estimates of India's GDP growth rate for FY23 currently range from 6.7 per cent to 7.7 per cent, we firmly believe that it is immaterial. In a world that is ravaged by uncertainties, we believe 6 per cent to 6.5 per cent growth is the new normal, the report noted.

 

The share of India's GDP is now at 3.5 per cent, as against 2.6 per cent in 2014 and is likely to cross 4 per cent in 2027, the current share of Germany in global GDP.

 

Broad-based growth of empowerment will also lift India's per capita income from current levels and this could also as a force multiplier for a better tomorrow.

 

The Indian economy is forecast to grow more than 7% this year. A world-beating rebound in Indian stocks this quarter has just seen their weighting rise to the second spot in the MSCI Emerging Markets Index, trailing only China’s.

Indian farmers need affordable machinery and technologies to expand production and come up with value-added products for export markets, said Shobha Karandlaje, Union Minister of State for Agriculture and Farmers Welfare, in Bengaluru, on September 2.

 

Speaking at the 7th International Exhibition and Conference EIMA Agrimach India 2022 in Bengaluru, the Minister said the country currently produced 314 million metric tonnes of cereals and 334 million metric tonnes of fruits and vegetables. However, she said, the country required affordable and quality food processing, agri-marketing and agri-export avenues to create value for the country’s agri-produce.

 

Ms. Karandlaje encouraged equipment manufacturers and technology developers to manufacture food-processing machinery so that food waste is reduced. 'Instead of wasting, through processing and value addition, the food could be exported to nations with limited food production avenues,' she added.

 

She also noted that with 2023 being the ‘International year of millets’, India could step up exports as the country was the leading producer of millets.

 

Murugesh R. Nirani, Minister of Large and Medium Industries said increased efforts were needed for technology improvement, adoption, and exports in the food sector. We want foreign industry participants to introduce affordable mechanised farming, given farmland holdings in Karnatka are small,’‘ said the Minister.

 

Noting the enhanced adoption of modern technologies such as IoT, AI and ML in agriculture, K. Ullas Kamath, Chairman, FICCI Karnataka State Council, said that Indian agriculture and allied sector were on the verge of adopting modern technologies such as IoT, AI and ML.

 

'Indian and foreign agrotech players can play a vital role in supplying these advanced technologies. At the moment, there are few players in the market, but the presence of six to seven million farmers in the country exhibits a huge opportunity for private and foreign entities,’‘ said Mr. Kamath.

Opportunities to strengthen economic ties between the U.S. and Tamil Nadu are high in a wide range of sectors, said Judith Ravin, U.S. Consul General, Chennai.

 

At an Indo-American Chamber of Commerce (IACC) roadshow here on Friday, she said the private sector was the engine driving growth in both the countries. 'We look forward to further strengthening our partnerships particular in areas of aero space, IT, education, manufacturing, energy, entrepreneurship, and climate change,' she said.

 

The last 10 years had seen substantial progress in improving the trade ties between the two countries. The bilateral trade of goods and services between the two countries in 2021 was over $ 159 billion. Foreign direct investment into the U.S. from India stood at $ 12.7 billion and FDI from the US into India was at $ 41.9 billion.

 

According to Gaurav Daga, Associate vice-president of Guidance Tamil Nadu, over 300 U.S. companies have invested nearly $ 11 billion in Tamil Nadu in sectors such as automobile, building materials, and chemicals. The Guidance Tamil Nadu is also promoting starts ups in the U.S. to invest in the State. Coimbatore, Tiruppur, Erode, Salem, Namakkal and the Nilgiris are export hubs in the western region of the State.

 

A. Sakthivel, president of Federation of Indian Export Organisations, said India and the U.S. had a lot of potential to strengthen economic ties. India had a positive trade balance and bilateral trade between the two countries should reach $ 500 billion by 2027.

 

Sanjay Jayavarthanavelu, Chairman and Managing Director of Lakshmi Machine Works, said the tie up between the U.S. and India was growing stronger and it was not just in trade but in investment too.

 

Chairman of Indo-American Chamber of Commerce - Tamil Nadu, Arun Miranda, said that in the last five years there was a huge shift of manufacturing to countries such as India, Indonesia and Vietnam. The IACC chose Coimbatore for the roadshow as the region was a leader in sectors such as precision engineering and textiles.

 

K. Ramasamy, convenor of Indo-American Chamber of Commerce Roadshow, said the U.S. offered good opportunity to Indian businesses not only to export and import but to invest too.

 

S. Chandrasekar, co-ordinator of the Roadshow, said the website www.iacckonguconnect.com was a permanent data base of manufacturers and exporters in the western region and it was a platform to connect businesses here and those in the U.S.

According to the advance estimates India’s production of Honey has touched about 133,200 metric tonnes in 2021-22 catapulting India to the second spot in the world behind China.

 

India, is also one of the world's top honey exporters and exported 74,413 MT of honey in 2021–2022 for a total of Rs 1221.17 crore.

 

The National Beekeeping & Honey Mission (NBHM) must assemble and encourage small and marginal beekeeping farmers for remunerative income generation, said Dr. Abhilaksh Likhi, Additional Secretary, Ministry of Agriculture & Farmers Welfare.

 

He said this should be done by involving all stakeholders, including the Ministry of Micro, Small and Medium Enterprises (MSME)/Khadi and Village Industries Commission (KVIC), Bee Societies, and organizations like NDDB, NAFED, & TRIFED.

 

Dr. Likhi was speaking at a workshop organised by the National Bee Board on 'Strengthening of Export Potential of Honey' at Vaikunth Mehta National Institute of Cooperative Management (VAMNICOM), Pune.

 

Future plans for promoting honey's export were also discussed by honey processors, exporters, and FPOs and Agri startups.

 

About 12,699 beekeepers are currently registered on the National Bee Board.

 

It has 19.34 lakh honey bee colonies, and India produces about 133,200 metric tonnes of honey (2021-22 2nd advance estimate).

 

India, one of the world's top honey exporters, exported 74,413 MT of honey in 2021–2022 for a total of Rs 1221.17 crore.

 

More than half of India's honey production is exported to other 83 nations including the USA, Saudi Arabia, the United Arab Emirates, Bangladesh, Canada, etc.

The Cabinet Committee on Public Purchase on Wednesday approved imports of 3.30 lakh tonnes of rice from Vietnam and India, and 5 lakh tonnes of wheat from Russia to replenish food reserves and cool domestic prices, said a top official.

 

'Some 2.30 lakh tonnes of rice from Vietnam and 1 lakh tonnes from India will be imported under a G2G [government-to-government] arrangement,' said Md Abdul Barik, additional secretary to the Cabinet Division, after the Cabinet committee meeting presided over by Finance Minister AHM Mustafa Kamal.

 

Soaring prices of food staple rice for the country's 16.50 crore people pose a problem for the government, which plans to expand cut-price rice sales to help people hard-hit by high costs.

 

Of the food staple to be imported from neighbouring India, Abdul Barik said 70,000 tonnes of non-basmati parboiled rice will be brought in by sea at Tk42.13 per kg. Besides, 30,000 tonnes of rice will be imported by road at Tk40.70 per kg. In both cases, the import price will be $443.50 per tonne.

 

The committee approved import of 2 lakh tonnes of Thai non-basmati parboiled rice from Vietnam at $521 per tonne. The local market price will be Tk49.49 per kg.

 

Import of 30,000 tonnes of sun-dried white rice from Vietnam was also approved at $494 per tonne, or Tk46.93 per kg at the local market.

 

The committee approved import 5 lakh tonnes of wheat from Russia on G2G basis as the import payment will be in the US dollar. The per kg import price of the wheat will be Tk40.85.

 

Md Abdul Barik said wheat import rate will be $430 per tonne as a Russian firm will supply this food grain. The total cost of importing 5 lakh tonnes of wheat will be Tk2,042.50 crore.

 

He said the grains will start entering Bangladesh in phases from September.

 

Apart from this, the government has finalised the import of 2 lakh tonnes of rice from Myanmar. Dhaka and Naypyidaw have already reached an agreement in this regard. According to sources at the food ministry, Bangladesh and Myanmar will soon sign an agreement for rice import.

 

The country's wheat import came to a grinding halt following the Russia-Ukraine war in the third week of February. The conflict had left the country's overall wheat import to 40 lakh tonnes against the demand of about 65 lakh tonnes in the last fiscal year.

 

Boro harvest in the March-April period was marred by flooding as low rainfall during recent Aman paddy plantation clouds the overall rice supply – forcing the government to race for replenishing food stocks.

 

Apart from the government import, private importers were approved to bring in 10.10 lakh tonnes of rice at reduced import duty.

 

In an effort to rein in surging domestic prices, the government is going to sell rice at a cheaper rate for 50 lakh families from 1 September. At the same time, the food directorate is ramping up its open market rice sales across the country.

 

Currently, the government has a record 17.92 lakh tonnes of rice and 1.41 lakh tonnes of wheat in stock. Still, the authorities are taking measures to boost the food stock further.

India and Bangladesh are expected to focus on new ways to enhance cooperation in crucial areas such as connectivity, trade, and sharing of river waters during Prime Minister Sheikh Hasina’s visit to the country during September 5-8.

 

Hasina will meet Prime Minister Narendra Modi, President Droupadi Murmu, and Vice President Jagdeep Dhankhar on the second day of her state visit. External affairs minister S Jaishankar will also call on her. Besides her engagements in New Delhi, Hasina will travel to Rajasthan to visit the famous shrine of Sufi saint Moinuddin Chishti and fly out from Rajasthan on September 8.

 

'In the recent years, both sides have sustained high level of engagement, including at the highest level,' external affairs ministry spokesperson Arindam Bagchi told a weekly news briefing while announcing the visit.

 

'The forthcoming visit of Prime Minister Sheikh Hasina will further strengthen the multifaceted relationship between the two countries based on strong historical and cultural ties and mutual trust and understanding,' he said.

 

The two countries are expected to sign an interim agreement on the sharing of waters of Kushiyara river during the visit, people familiar with the matter said.

 

The two sides finalised the text of the agreement at the ministerial-level meeting of the India-Bangladesh Joint Rivers Commission held in New Delhi on August 25.

 

India and Bangladesh share 54 rivers, of which seven have been identified for developing a framework of water-sharing agreements. The Joint Rivers Commission was constituted in 1972 as a mechanism for addressing issues of mutual interest related to cross-border rivers.

 

Hasina last visited India in October 2019, and this was followed by Modi’s visit to Dhaka in March last year to participate in Bangladesh’s independence day celebrations. Ties between the two sides have witnessed considerable progress in recent years, especially in the field of connectivity, trade and energy, and leaders from both countries have said the current phase as a 'shonali odhyay' (golden chapter).

 

India has hosted a series of events to mark the 50th anniversary of the 1971 war that led to the creation of Bangladesh from the erstwhile East Pakistan.

The World Bank’s food security update of August 2022 flagged how global concerns over the likelihood of a rice export ban by India are rising. It noted that 'exporters, concerned that export restrictions will be introduced (as has been done for wheat), are moving quickly to open letters of credit and have signed contracts to export 1 million tonnes of rice from June through September 2022.' But are these concerns real? Is there any cause for worry in the case of Indian rice? Our estimates show that even though there is no palpable threat to India’s food security, the window of Indian rice exports this year may be constrained.

 

In 2021-22, India produced about 130.29 million metric tonnes (MMTs) of rice. About 86 per cent of this (about 112 MMTs) was produced during the Kharif season (sown during June/July and harvested during November/December). The remaining 14 per cent was produced in the winter months during the Rabi season.

 

As per NITI Aayog’s demand and supply projections, India’s projected consumption in 2022-23 will be  about 108 to 109 MMTs of rice.  In addition to the central pool stocks of rice with the government, the private sector also maintains some stocks of rice that move between crop years. But, if we assume for the sake of understanding, zero opening and closing rice stocks, then it appears that last year, the country generated a surplus of about 22 MMTs (130.29 – 108.28). This was approximately the amount of rice that was exported from the country last year. However, this will not be the case every year, as stocks both with the Food Corporation of India (FCI) and the private sector play an important role in India’s rice balance sheet.

 

Problems for India’s rice crop this year

This year, there are news reports of lower paddy acreage and yield. But it is not just the area coverage that is lower than last year. There are reports of the drying of transplanted paddy crop in fields primarily due to lack of irrigation. Inter alia, there appear to be three reasons for this. First, deficit rains in key paddy growing states of Uttar Pradesh, Bihar and West Bengal, which produce about one-third of India’s paddy. Second, dwarfing of rice plants caused by a Southern Rice Black Streaked Dwarf Virus (SRBSDV) attack and third, more remunerative price incentives for sister crops like soybean, and cotton.

 

Kharif is the main cropping season in India and it pivots on monsoon rains. About 52 per cent of India’s gross cropped area has assured irrigation, as per data from the Ministry of Agriculture. This implies that about 48 per cent area depends directly on monsoon rains for irrigation. Even in irrigated areas, rains are needed to reduce dependence on electricity and diesel. So, if there is serious deficiency in rainfall, the crop production and its costs of cultivation are bound to be adversely impacted.

 

As of 29 August 2022, India’s monsoon showers are about 7 per cent above their long-period average value (LPA). Interestingly, the LPA value has itself been adjusted downwards this year in light of shrinking volumes of Indian monsoon rains over time. Despite a good monsoon figure at an all-India level, six states/Union Territories have received deficient rains. These states include Uttar Pradesh (with a rain deficit of 44 per cent), Bihar (with a deficit of 39 per cent), Jharkhand (deficit of 26 per cent), Manipur (deficit of 44 per cent), Tripura (deficit of 28 per cent) and Delhi (deficit of 31 per cent).  Until recently, West Bengal was also in this category. However, a recent spurt in rains has pulled up its rain measure, though it still shows a deficit of about 18 per cent.

Indian exporters will likely enter into deals to ship out at least five million tonnes (mt) of sugar once the Centre lifts the 10 mt cap imposed on shipments for the current sugar season to September 30.

 

The export prospects are despite the International Sugar Organization (ISO) estimating higher production and ending stocks during the 2022-23 season starting October 1. 

 

'We hope the Centre will remove the ceiling on exports after September 30. If that happens and exports are allowed, deals to ship five lakh tonnes will be signed in a month’s time,' said Praful Vithalani, President, All India Sugar Traders Association (AISTA). 

 

 

Demand from Gulf, Asia

'Government should open up exports from October 1. Deals for 5-6 mt of sugar exports are likely to be signed in the first tranche. Though early, sugar production is expected to be 35 mt next season,' said Rahil Shaikh, Managing Director, MEIR Commodities India. 

 

Vithalani said there are good enquiries for raw and refined sugar from the Gulf and other Asian countries 'as usual'.  Reuters reported that the Centre could allow sugar exports in two tranches with 4-5 mt in the first and the rest in the second.

 

The wire agency reported that the Government may cap sugar exports next season at 8 mt compared with the 11.2 mt permitted this season. It also reported that traders have signed to ship out at least three lakh tonnes once the Centre permits the resumption of exports. 

 

The Centre initially capped the exports at 10 mt this season before permitting an additional 1.2 mt. The restriction was imposed to ensure the country had ample stocks during the festival season.

 

ISO projections

Sugar production has been estimated at 36 mt in 2021-22 with another 3.4 mt being diverted for manufacturing ethanol. Consumption has been estimated at 27.5 mt and the country’s ending stocks are projected at 6.7 mt, ample enough to meet three months’ demand in the domestic market.  

 

The ISO came out with its sugar balance sheet on Wednesday night, estimating nearly 5 per cent higher production next season at 181.91 mt and ending stocks increasing by over 3 per cent to 96.35 mt. 

 

The projection is seen as bearish with raw sugar prices dropping by about 10 per cent year-on-year to 17.92 cents a pound (Rs. 31,700 a tonne) on the Intercontinental Exchange, New York. In London, white sugar for October delivery was quoted at $554.50 a tonne. 

 

'ISO is projecting a surplus because of Europe and Brazil. We don’t agree with the estimates. India will enjoy an advantage at least until April 2023,' said Vithalani.

 

Another bounty season

'At least 4.5 mt of sugar production will go into the making of ethanol. One of the steps the Centre can take to promote exports is to allow them under the open general licence (OGL). But I don’t think it will happen,' said Shaikh.

 

The Indian Sugar Mills Association, a body of private millers, has estimated another bounty season in 2022-23 with a higher diversion of sugar production to ethanol. The estimate is based on projections of a higher area under sugarcane.

 

According to the Ministry of Agriculture and Farmers Welfare, the area under sugarcane as of August 26 was 55.59 lakh hectares compared with 54.70 lakh hectares a year ago. 'The area under sugarcane in Uttar Pradesh is higher. It will increase in Maharashtra too,' Shaikh said. 

 

'We are getting good enquiries from Malaysia and Indonesia too. India should be the market maker next season,' Vithalani said. 

 

Domestic prices up

'Domestic demand is strong. Prices in local markets have increased by Rs. 2,000 a tonne in the past couple of months,' Shaikh said. Currently, sugar prices are ruling at Rs. 3,380-3430 a quintal in Maharashtra and above Rs. 3,450 in Uttar Pradesh.

 

According to the Ministry of Consumer Affairs, the all-India average price of sugar in the country is Rs. 42.43 a kg, up 1.78 per cent month-on-month and 4.48 per cent year-on-year.

 

Besides Brazil and Europe, sugar supplies from Thailand are also expected to increase next season.

Climate change has affected the production of wheat and paddy in the country, indicating a need to shift focus to coarse cereals. Cultivation of the two crops will not be enough to meet the country’s food needs due to erratic weather patterns, a senior central government official recently observed. 

 

The remark was not made by a climate scientist but by the secretary for the department of food and public distribution (DFPD) under the Centre, Sudhanshu Pandey. The observation indicated the central government has realised that depending on just wheat and rice to provide rations to the poor under the National Food Security Mission is not enough. There is a need to look for alternative food grains. 

 

The production of wheat has been low this Rabi season, indicating a crisis. However, a DFPD statement August 21, 2022, claimed the country has sufficient wheat stock to meet the domestic requirement.

 

Sustainable agriculture practices also require a shift in usual farming methods from just wheat and rice, said food policy analyst Devinder Sharma. 'It has become imperative that the country adopts sustainable farming systems. Coarse cereals must be promoted for it,' he said. 

 

A meeting was organised by DFPD August 30, 2022, to discuss the procurement of the Kharif produce for 2022-2023. Food secretaries of all states and Food Corporation of India officials also attended the meeting. 

 

The officials decided that 51.8 million tonnes of rice would be procured from the Kharif market. Last year, 50.98 million tonnes were acquired. 

 

However, wheat procurement after the Rabi season this year was much lower than the target. Therefore, rice quantity in the Kharif market might be affected as well. Some states in the meet suggested procuring coarse grains to meet the requirement. 

 

The officials decided to acquire 1.37 million tonnes of coarse cereals, also known as superfoods, from the Kharif market. The total procurement of coarse grains till now has been 0.63 million tonnes — meaning its target has been more than doubled. 

 

Karnataka purchased the maximum amount of coarse grains through July 31, 2022, according to Food Corporation of India data. The state procured 0.5 million tonnes of the superfood grains.  

 

Madhya Pradesh purchased 38 thousand tonnes of the grains, 41 thousand in Maharashtra, 32 thousand in Odisha, eight thousand in Gujarat and only three thousand tonnes of coarse grains were bought in Uttar Pradesh. However, the state-wise target for coarse grains will be decided later.

 

Erratic monsoon 2022 has increased the government’s concern for the Kharif season yield. The sowing of paddy and pulses was severely affected in most areas this year. 

 

This year, sowing was done in 36.75 million hectares of land through August 26, 2022. This is 2.34 million hectares less than last year, showed data from the Union ministry of agriculture. At the same time, pulses have been sown in 12.77 million hectares this year, while last year pulses were sown in 13.43 million hectares — 666,000 hectares less.

 

Even the sowing of oilseeds has decreased slightly this year. However, the sowing for coarse grains has increased.

 

Coarse cereals have been sown in 17.63 million hectares this year as against 16.93 million hectares last year — an increase of 694,000 hectares. The acreage of millet has increased the most.

 

Bajra or pearl millets was planted in 6.31 million hectares last year, but this time it has been produced in 7.01 million hectares. The usual acreage for bajra is 7.34 million hectares.

 

Acreage for maize has also increased slightly. Last year, maize was planted in 7.9 million hectares, while this year 80.85 lakh hectare has been planted this time. 

 

In the future, more coarse cereals might be given out under the public distribution system instead of wheat and rice. There have been examples of coarse cereals in rations earlier as well. In July 2022, Karnataka was allocated 113,000 tonnes of coarse cereals instead of rice under the NFSA. 

 

Earlier, 67,019 tonnes of coarse grains were allocated in Karnataka and 14,500 tonnes in Madhya Pradesh under the Act.

 

The question remains whether growing more coarse cereals will benefit farmers. 'This is a big question. The government should make it mandatory for Farmers Producer Organizations (FPOs) to buy at MSP only,' said Sharma. 

 

About 50 million tonnes of coarse cereals are produced in the country at present. Maise and millets are grown the most. 

 

The production of Bajra this year is likely to be 9.62 million tonnes, as against 10.50 million tonnes last year, according to the Union agriculture ministry’s Fourth Advance Estimates for 2012-22. Production estimates of the current Kharif season will come later. 

 

An increase in maize production is projected. Maize production was 30.90 million tonnes last year, as against 33.62 million tonnes in the fourth advance estimate.

THE CENTRE expects the kharif crop rice procurement figure to reach at 518 lakh metric tonnes during the upcoming kharif marketing season (KMS) 2022-23, the Union Ministry of Consumer Affairs, Food and Public Distribution said on Tuesday.

 

The estimated quantity of rice procurement will be marginally higher than the actual procurement of 509.82 LMT during last KMS 2021-22 (Kharif crop).

 

The ministry announced the estimated procurement figure after a meeting of state Food Secretaries on Tuesday, which was chaired by the Union Food Secretary Sudhanshu Pandey. The meeting was also attended by officials of Food Corporation of India (FCI). The meeting was called to discuss the procurement arrangements for Kharif crop ensuing Kharif Marketing Season (KMS) 2022-23.

 

 

In a statement, the Food Ministry said, 'The meeting was attended by Principal Secretary/Secretary (Food) or Representatives of Andhra Pradesh, Assam, Bihar, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Jharkhand, Karnataka, Rajasthan, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Tamil Nadu, Telangana, Tripura, Uttar Pradesh, Uttarakhand and West Bengal. The meeting was also attended by Chairman & Managing Director, FCI and other officers of FCI, Department of Food & Public Distribution, Indian Meteorological Department and Department of Agriculture and Farmers Welfare.'

 

'A quantity of 518 LMT rice has been estimated for procurement during the forthcoming KMS 2022-23 (Kharif crop) as against 509.82 LMT actually procured during last KMS 2021-22 (Kharif crop).'

 

'During the meeting, issues relating to adoption of mechanized procurement operations, borrowing at lower interest rate, reduction in cost of procurement operations, adoption of innovative techniques and quality control mechanism, promotion of millets, gunny bags requirements, online settlement of food subsidy claims etc. were discussed and it was suggested that such innovations should be incentivized,' the statement said.

 

As per the statement, Pandey told the meeting that focus should be on procurement of millets, not only on account of International Year of Millet-2023 but also because of climate changes.

 

'Climate changes have been adversely affecting wheat and rice and resulting in reduction in their production. A quantity of 13.70 LMT coarse grains ‘super food’ has been proposed for procurement by the states during the forthcoming KMS 2022-23 as against actual procurement of 6.30 LMT as on date,' the statement said.