India is the world's second most populous country and its fastest growing major economy since 2000. It 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.
The 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 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)
- 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)
(December 2015) and "India's Agricultural Growth Propellers" (Amber Waves, April 2016). (Chart # 1, below)
- India is likely to remain an important player in global agriculture markets as an importer of vegetable oils and pulses, and an exporter of rice, cotton, and beef (see "Food Policy and Productivity Key to India Outlook" (Amber Waves, July 2015). (Chart # 2, below)
- In regions of India affected the most by a dramatic surge in global food prices several years ago, households coped by sacrificing diet diversity as well as expenditures on medical expenses and durable goods (see Coping Strategies in Response to Rising Food Prices: Evidence From India (November 2014).
- Despite progress, India still accounts for the largest share of the world's food insecure population. The new National Food Security Act increases the households eligible for subsidized food grains, but questions remain on its impact (see "India Continues to Grapple with Food Insecurity" (Amber Waves, February 2014).
- 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 (May 2012).
- Reforms that improve the efficiency of India's agricultural markets could generate economy-wide gains in output and wages, raise agricultural producer prices, reduce consumer food prices, and increase consumption, particularly by low-income households (see Growth and Equity Effects of Agricultural Marketing Efficiency Gains in India (December 2009).
- An array of policies and regulations affecting agricultural production, marketing, and food processing—along with weak infrastructure and a lack of market services—have discouraged private investment by farmers and large, vertically integrated agribusinesses (see The Environment for Agricultural and Agribusiness Investment in India (July 2008).
- Pronounced market cycles, budgetary concerns, and declines in per capita consumption of India's major food staples, wheat and rice, are creating pressure for Indian policymakers to adjust longstanding policies (see Indian Wheat and Rice Sector Policies and the Implications of Reform (May 2007).
- High tariffs on oilseeds and oil affords little benefit to oilseed producers and impose high costs on consumers. Lower trade barriers could encourage India processors to boost capacity utilization with imported oilseeds, resulting in lower processing costs, and increased net revenues and employment (see The Role of Policy and Industry Structure in India's Oilseed Markets (April 2006).