Why agriculture sector is missing from India’s FTAs

India’s trade diplomacy is buzzing with activity. New Delhi has recently inked free trade agreements (FTAs) with the United Kingdom, a trade and economic partnership agreement with the EFTA bloc, and concluded terms of reference for an India-US trade agreement. It is also negotiating with the European Union. In short, India is racing to plug itself into shifting global supply chains. Yet amid all the flashbulbs and photo‑ops, India’s agriculture sector remains conspicuously absent.

This exclusion is not new. In 2019, India walked away from the RCEP, wary that a surge of cheap dairy imports would upend its farmers. Years later, despite growing experience and evolving geopolitics, the pattern continues. Access to the domestic agricultural market is either off the table, in the sensitive list, or slapped with a transition period of decades.

The reasons are valid. Agriculture is a political dynamite — subsidised, emotional, and electorally potent. Reforms have been tried (and reversed), protests have been heard (loudly), and policymakers have learnt to walk the tightrope. But is perpetual protectionism a viable long-term strategy?

Consider the recent data: India’s agricultural exports stood at $48 billion in 2023-2024, down from $52 billion the year before. Meanwhile, Thailand is growing agri-exports at 8% CAGR. Its playbook? Focus on industrial crops like rubber, strong backward integration with agro-processing, and building niche sectors such as pet food, all powered by strategic FTAs — over 18 and counting.

Across the seven seas, Brazil exported $166 billion, led by soy complex, coffee, and processed meat. Brazil’s strength lies in large-scale mechanised farming, logistics corridors, compliance labs and robust port infrastructure. It moved up the value chain — from just soybeans to oil to soybean meals.

In contrast, we still incentivise growing rice we don’t need with electricity we can’t afford. Export consignments are too often rejected due to pesticide residue in mangoes, or aflatoxins in peanuts courtesy SPS (Sanitary and Phytosanitary) measures. While the Agriculture & Processed Food Products Export Department Authority (APEDA) promotes quality and certification, smallholder farmers remain disconnected from these pipelines.

But it’s not all gloom. Basmati branding is a success, amounting to 21% of agri exports. GI-tagged products under ODOP are gaining traction. However, cold chains are missing, and farmers are fragmented and not a part of the export ecosystems.

To boost India’s agri-export chances, we could take these vital steps:

Brand it, don’t just bag it — India has focused too heavily on raw commodities. This not only limits export revenue but exposes us to commodity price volatility. Value addition requires a network of agro-processing facilities near the Agriculture Produce Marketing Committees (APMCs). These clusters must be linked to export aggregators and incentivised through outcome-based schemes. India doesn’t just need to export more — it needs to export smarter.

Sown once, regulated thrice — One of the most persistent challenges in agri-exports is fragmented governance. Agriculture is a state subject, while trade is the Centre’s prerogative. This creates a regulatory tug-of-war — where export bans, pesticide norms, or quarantine rules differ, delay, or contradict each other, creating uncertainty for exporters and chaos for farmers.

A national agri trade council — with representatives from Centre, states, APEDA,FSSAI, and industry — should drive synchronised policy rollouts. Clear communication protocols, single-window export clearances, and digital compliance dashboards can reduce friction.

Invest differently — India’s current agri-investment model — free water and electricity, subsidised seeds and urea, and assured MSP — provides safety, but discourages innovation. Farmers remain locked in legacy crops, disincentivised from experimenting with high-value produce.

It’s difficult to think of a time without the subsidies, but can we shift to a no-questions-asked direct benefit transfer (DBT)? It can provide the flexibility and risk capital the farmers need. While cash transfers have sparked ideological debates, in agriculture they could enable farmers to make their choices. Over time, the DBT could even lay the early groundwork for a universal basic income (UBI) model — a safety net that’s less leaky and more empowering.

Agri-tech — India needs farmer-facing tech which facilitates weather advisory, crop illness detection through AI-based scans, and streamlining discovery of government schemes. These solutions must be mobile-first, vernacular, and embedded in existing extension networks. Technology won’t replace the farmer, but it will replace the guesswork. Schrodinger had a theory on cats— Indian farmers don’t need that. They need real-time data, real-time solutions, and real-time confidence.

Similarly, a digital backbone that allows for beneficiary tracking, transparent scheme disbursement, and GIS mapping of produce clusters is a must. This intelligence will enable data-driven decisions — such as where to set up processing units, which zones need pre-cooling chains, or how to route logistics. Smart governance needs smarter data.

Improve connectivity — The agri-export story is strongest at the coasts — Gujarat, Maharashtra, and Andhra Pradesh. But the engine room of Indian agriculture — Uttar Pradesh and Madhya Pradesh — remains stuck in second gear. Here, the challenge is not production, but logistics.

Landlocked states need targeted interventions: inland container depots, cold storage networks, and seamless linkages to the nearest export-ready ports. The hinterland has the volume; what it lacks is access. Let UP’s mangoes and MP’s soybean find markets without the middle-mile becoming a red thread wall of madness.

(Shubhajeet Sil, Account Director- Public Policy, Chase India)

(Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.)