Determinants of Agricultural Exports of India: A Commodity Level Analysis

The export opportunity allows the agricultural sector to expand productive capacity to the full extent. An attempt is made in the present study to specify and estimate the factors affecting agricultural exports of India at the commodity level. The major exportable crops used in the study are rice, wheat, tea, coffee, sugar, cotton lint and tobacco. The literature surveyed clearly shows that Indian exports are influenced by a number of factors. A double log-linear regression analysis has been carried out to understand the role of different factors in affecting agricultural exports across commodities from 1980-2010. Examining determinants of agricultural exports at commodity level is critical for proper allocation and effective utilisation of resources.

The findings of the study validate the hypothesis that the impact of various factors on agricultural exports may not be the same for all commodities. The export determination models suggest that agricultural exports of India are affected by a number of demand and supply side factors. In a nutshell, the empirical findings reveal the predominance of factors like lagged export, production and world income in determining agricultural exports of India. For rice and wheat rather than production, stock with the government influences export to a large extent. Because of semi government interventions in cereal market, actively for mandatory PDS, exports are not allowed on regular basis for many tradable commodities like wheat, therefore, much depends on demand and supply. The findings of the study are relevant to design public policies in the external sector.