India is a major agricultural country in Asia, and agriculture has always occupied a leading position in the national economy. In the past 40 years, although India has been vigorously developing industries such as industry and information technology, up to now, about 80% of the population in India still rely on agriculture for their livelihood, and the net agricultural output value accounts for over 30% of the gross domestic product. It can be said that the growth rate of agriculture largely determines the growth rate of India's national economy.
India has the largest cultivated area in Asia, with 143 million hectares. From this data, India can be called a major agricultural production country. India is also a major exporter of agricultural products, with an annual export volume of about 2 million tons of wheat alone. The export volume of several other important agricultural products, such as beans, cumin, ginger, and pepper, also ranks among the top in the world.
Large exports of agricultural products have always been a powerful tool for India to create foreign exchange. However, this year, constrained by the international situation, Indian agricultural products are facing significant difficulties, both in terms of domestic production and export. The previous "sell and sell" policy has also brought about various problems in the domestic economy, people's livelihood, and other aspects.
In 2022, Russia and Ukraine, as the world's major food exporters, were affected by the conflict, resulting in a significant reduction in wheat exports. India's wheat exports as a substitute in the market demand increased significantly. According to forecasts by domestic institutions in India, India's wheat exports in the fiscal year 2022/2023 (April 2022 to March 2023) may reach 13 million tons. This situation seems to have brought great benefits to India's agricultural export market, but it has also led to a surge in domestic food prices. In May of this year, the Indian government announced a slowdown or even a partial ban on wheat exports on the grounds of "ensuring food security." However, official data show that India still exported 4.35 million tons of wheat in the first five months of this fiscal year (April August), an increase of 116.7% year-on-year. The export volume of agricultural products has increased sharply, and the prices of basic crops and processed products such as wheat and wheat flour in India's domestic market have increased significantly, leading to serious inflation.
The diet of Indian people is dominated by grains, and only a small portion of their income is consumed on foods with high prices such as vegetables and fruits. Therefore, in the face of rising food prices, the living situation of ordinary people is even more difficult. To make matters worse, farmers have chosen to hoard their crops in anticipation of rising prices due to rising living costs. In November, officials from the Indian Cotton Association publicly stated that the new season of cotton crops had been harvested, but many farmers hoped that the prices of these crops would continue to rise as before, so they were unwilling to sell them. Such a clampdown on sales has undoubtedly further exacerbated inflation in the Indian agricultural market.
India has formed policy dependence on a large number of exported agricultural products, and has become a "double-edged sword" affecting the Indian economy. This issue has become very evident against the backdrop of the complex and volatile international situation this year. If we examine the underlying reasons, this dilemma is related to the long-standing reality in India. Specifically, India's grain production is "large in total but small per capita". Although India has the largest cultivated area in the world, it has a large population and a small per capita cultivated area. In addition, India's domestic agricultural modernization level is relatively backward, lacking advanced farmland water conservancy and irrigation facilities and disaster prevention facilities, relying heavily on human resources, and relying less on agricultural equipment, fertilizers, and pesticides. This has led to a significant impact on the agricultural harvest in India almost every year due to the arrival of the monsoon. According to statistics, India's per capita grain production is only around 230 kilograms, far below the international average of 400 kilograms per capita. It seems that there is still a certain gap between India and people's conventional perception of the image of an "agricultural power".
