Commentary: How much does India’s wheat export ban threaten global food supplies?
Beijing also called on G7 countries to enhance their supply to the global market to stabilise prices. The support needs to be viewed as a subtle overture, as several China-developed apps are still banned in India. Any drastic improvement in the Sino-Indian relationship, in light of this Chinese overture, is unlikely.
One of the government’s major announcements in 2016 was to double farm income by 2022, which requires stability in production and exports.
While the wheat export ban decision does not contribute to this goal, it may secure price stability domestically – a popular political move. But arriving at a market-based solution to secure the long-term growth of the sector is the need of the hour.
Indian policymakers need to urgently focus on agricultural input market reforms to reduce the cost of cultivation. Doing so will boost demand and, in turn, agricultural production.
At the same time, it will provide Indian players the much-needed price competitiveness, which would limit the need for public stockholding operations and minimum support price reliance, consequently deepening export opportunities.
Otherwise, agriculture will continue to haunt negotiators as the Achilles’ heel during multilateral and regional trade negotiations, and periodic export bans on primary commodities will sadly remain a rule rather than an exception.
Debashis Chakraborty is an Associate Professor of Economics at the Indian Institute of Foreign Trade (IIFT). This commentary first appeared on East Asia Forum.
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