India's Agricultural Exports to China: Some Constraints

Over the years, the composition of Indian merchandise exports to China has transformed further in favour of manufactured goods. The combined share of agricultural exports declined from 34.5 per cent during triennium ending 1999 to only 5.2 per cent during triennium ending 2005. This revelation comes as a surprise despite the global competitiveness of India in most of its agricultural exports. This paper attempts to identify the future potential for India’s agricultural exports to China. The paper identifies agricultural exports of Indian origin that have revealed comparative advantage in the international market but reveal a comparative disadvantage vis-a-vis China. This points to the presence of any prohibitive or restrictive policies against such agricultural products of Indian origin. Such exports have been identified to include mostly Animal or vegetable fats, oils & their wastes products and exports of Tobacco & manufactures. Removal of constraints in these categories would unleash the potential of exports under these categories and lead to diversification of Indian agricultural exports to China. Diversification in the agricultural exports would help in balancing the structure of India’s overall exports to China.