India is the world's second most populous country and one of the world’s fastest growing major economies since 2000. India is also among the world's largest producers and consumers of a range of crop and livestock commodities. While still classified as a lower middle-income country, rapid economic growth is expanding and diversifying food demand, pressuring the farm sector to boost currently low levels of productivity, and challenging agricultural policies traditionally focused on self-sufficiency.
ERS outlook and research programs focus on understanding the supply, demand, and policy factors that influence India's behavior in world markets for commodities important to U.S. agriculture. In addition, because India accounts for the largest share of the global population classified as food insecure, ERS research addresses questions related to the measurement and causes of household food insecurity in India. A complete list of recent ERS reports and articles is available here.
Recent Trends in India's Agricultural Economy
- India is the world’s leading importer of soybean oil, ahead of the European Union and China. Over the past decade, domestic soybean oil use in India has grown by double-digit percentages. By 2018-19, India imported about 63 percent of its domestic soybean oil consumption, with its imports accounting for more than 42 percent of global soybean oil imports. While soybean oil imports are strong, India’s imports of whole soybeans are negligible because of tariffs, as well as phytosanitary requirements and a ban on production or imports of genetically modified (GM) soybeans (see Trade Liberalization Could Benefit India’s Soybean Processing Sector).
- India is the world’s largest producer and consumer of milk. Growth in milk supply and demand has been robust, but projections indicate that production targets will be difficult to reach without stronger gains in productivity. India is now a small net exporter of dairy products, but trade policies have facilitated imports when shortages lead to high domestic prices (see India's Dairy Sector: Structure, Performance, and Prospects and Changes in Herd Composition a Key to Indian Dairy Production).
- India's agricultural performance since 1980 suggests that increases in productivity have spread from the northern grain belt, led by accelerated growth in production of horticulture and animal products (see Propellers of Agricultural Productivity in India and India's Agricultural Growth Propellers).
- Since the late 2000s, India's exports of beef—specifically water buffalo meat—have expanded rapidly, with India emerging as the world's largest beef exporter in 2014. So far, Indian water buffalo meat exports have not been competitive with U.S. beef exports, primarily because they do not meet the quality preferences and animal health regulations required in the major U.S. markets. (see From Where the Buffalo Roam: India's Beef Exports and India Emerges as a Major Beef Exporter).
- Rising incomes, urbanization, and India’s youthful demographic profile are expected to shape continued growth and increased diversity in consumer food demand. While per capita consumption of staple grains, such as rice and wheat, has been relatively stable, demand for higher valued foods—fruits, vegetables, edible oils, dairy products, and poultry meat—has been robust. Alongside this growth story, however, Government estimates indicate that about 22 percent of India’s population—or about 260 million people—remain in poverty. According to USDA estimates, India still accounts for the largest share of the global population classified as food insecure. (see Food Policy and Productivity Key to India Outlook).
- Despite progress, India still accounts for the largest share of the world's food insecure population. India’s new National Food Security Act increases the number of households eligible for subsidized food grains, but questions remain on its impact (see India Continues to Grapple with Food Insecurity and Global Food Security).
- Analysis of household data found significant differences in calories consumed and the number of food-insecure people under alternative plausible estimates of the calorie content of some foods and of meals eaten outside the household (see
Estimating the Range of Food-Insecure Households in India ).
- Reforms that improve the efficiency of India's agricultural markets could generate economy-wide gains in output and wages. These reforms could raise agricultural producer prices, reduce consumer food prices—and increase consumption, particularly by low-income households ( Growth and Equity Effects of Agricultural Marketing Efficiency Gains in India ).