Competitiveness of Indian Agricultural Exports: A Constant Market Share Analysis

Abstract

The 1991 Indian reforms aimed at economic liberalization, as a part of its economic structural adjustment, and transformed the nation’s economy into a more global market-based and service-oriented system, which revolutionized its agricultural trade facet. The new regime paved the way for self-reliant Indian agriculture to expand its roots into the spheres of global competitiveness and export orientation. India enjoys a competitive advantage in the international market and considering the growth in India’s exports of major agricultural commodities. This study employed the Constant Market Share model to analyze the export performance of its various facets such as diversification, instability, elasticity, competitiveness, etc. The findings revealed that India’s growth performance of major agricultural commodities’ exports both in terms of quantity and value was found satisfactory (except wheat and cashew nuts, shelled (quantity)) during 1991-2020. During the recent past decade, i.e., 2011-2020, World Demand Effect (WDE) is the main source of India’s agricultural export performance (due to the general rise/fall in world demand given a constant market share of India, unlike Market Distribution Effect (MDE), Commodity Composition Effect (CCE) and the Residual Competitiveness Effect (RCE) due to high inconsistency arising out of changes in the external environment). Both MDE and RCE with respect to commodity-wise exports and CCE and RCE with respect to country-wise exports are found negative for the majority of commodities and countries (markets) respectively. Consistently negative CCE for exports of agricultural products, total and across major export destinations were found more disheartening and this should deserve special attention. So, it is imperative to boost the export competitiveness of agricultural commodities from India and the future prospects of exports depend on how much the latest surge in COVID-19 infections in India affects its agricultural production and global demand conditions.