India’s expanding role in global agricultural markets raises a question that goes beyond export performance: How is the country integrating into global value chains. In a context shaped by geopolitical shifts, evolving trade patterns, and supply chain uncertainties, the issue is not whether to integrate, but how to do so while managing domestic risks.
Over the past decade, India’s agri-food exports have grown from about $22–23 billion in 2013–14 to over $48 billion in 2023–24, with recent estimates close to $49 billion. This expansion reflects gains in production and improved market access. However, the export basket remains concentrated. Commodities such as rice, sugar, spices, and oilcakes account for a large share of export earnings, with rice and sugar alone contributing over $11 billion in 2022–23.
This concentration exposes the company to both domestic and external shocks. When India restricted non-basmati rice exports in 2023 to stabilise domestic prices, global markets adjusted quickly. Import-dependent regions experienced price pressures, and some buyers shifted sourcing to countries such as Vietnam and Thailand. More broadly, the period between 2020 and 2024 saw multiple countries impose export restrictions on food commodities, indicating a shift toward more cautious and less predictable trade behaviour.
Geopolitical developments have further jolted supply chains. The ongoing Russia-Ukraine conflict and the other conflict between the United States, Israel, & Iran, which started on February 28, although on a ceasefire, currently, has together affected India’s core industries’ output, with a record-low production of fertilisers, down 24.6% YoY in FY26, while crude oil and coal production fell by 5.7% and 4%, respectively. These developments illustrate how agricultural outcomes are increasingly influenced by factors beyond agricultural yields. Increases in global urea prices and higher freight costs due to shipping disruptions highlight these linkages. Although domestic fertiliser stocks appear stable, they remain highly dependent on sustained imports, while the government bears all the losses as it increases subsidies to neutralise the price effect on farmers.
At the same time, India’s agricultural outcomes present a mixed picture. The country is a major producer of cereals, milk, and pulses, yet nutritional indicators remain uneven, reflecting not only issues of access but also the structure of production incentives and value chains. Public policy has historically focused on cereals through procurement and price support mechanisms, ensuring caloric adequacy. However, changing consumption patterns are increasing demand for proteins, fruits, vegetables, and processed foods.
Limitations within the value chain remain a major issue. For example, previously, post-harvest losses in fruits and vegetables were estimated at 15–20%, largely due to gaps in storage and logistics infrastructure. Processing levels for perishable commodities are relatively low, and cold-chain coverage remains limited. Combining these factors, they directly affect both farmer incomes and consumer price stability.
From a global value chain perspective, these constraints can limit participation in higher-value markets. Export segments increasingly require consistent quality, compliance with standards, and traceability. Fragmented supply chains and uneven quality control can make it difficult to meet these requirements reliably. There have been instances of export consignments facing rejection due to quality concerns, while global buyers often prioritise suppliers that offer reliability and policy stability.
Some sectors demonstrate that stronger integration is possible. In basmati rice and marine products, more coordinated value chains have supported competitiveness in export markets. These examples suggest that improved coordination between production, processing, and marketing can enhance participation in higher-value segments. The broader challenge lies in extending such models across a more fragmented agricultural system.
With everything else, trade policy remains central to managing these dynamics. Export restrictions have been used to address domestic price volatility, but they can also introduce uncertainty for global buyers and investors. Policy predictability is an important factor in value chain development. Investment in processing infrastructure, logistics, and long-term sourcing relationships typically depends on stable policy conditions. Because frequent changes may limit such investments and, in turn, affect deeper integration into global markets.
A balanced approach to integration may, therefore, be useful. This would involve strengthening domestic mechanisms, such as buffer stocks and targeted safety nets, to manage price volatility while reducing reliance on broad trade restrictions. At the same time, addressing structural gaps within value chains will remain important.
Investments in storage, logistics, and processing infrastructure can reduce losses and improve value realisation, while empowering testing and certification systems to support compliance with global standards. Digital platforms can also improve traceability and coordination across supply chains.
More broadly, aligning agricultural policy with nutritional and sustainability objectives will require coordination across sectors, including agriculture, trade, and health. Encouraging diversification toward crops that are both nutritionally beneficial and resource-efficient can support this transition.
As we are witnessing, global agri-food systems are evolving toward a more layered structure, where global integration coexists with regional and domestic resilience. In this context, resilience can be seen as complementing efficiency rather than limiting it.
India’s position in this changing landscape will depend on how it adapts its value chain strategy. The focus is likely to extend beyond increasing export volumes to improving the quality, stability, and value of participation in global markets. This involves viewing agriculture as an interconnected system of resilient value chains where competitiveness, resilience, and sustainability are closely linked.
The direction of this transition is becoming clearer. Future actions involve alignment in policy, infrastructure, and institutional frameworks to support it.
(The views expressed are personal)
This article is authored by Vidya Vemireddy, faculty member, Centre for Management in Agriculture (CMA), Indian Institute of Management, Ahmedabad.
