How India can increase its exports to RCEP countries

The figures in the table above should further surprise us when we realise that the shipping distance from Ecuador to Japan is thrice that from India to Japan. The reason that Ecuador exports much more than India is that they export what Japan wants.

In 2019, India had a share of less than one percent of the world’s trade in frozen vegetables. India is the second-largest producer of aubergine in the world, but it is Vietnam which exports frozen aubergine slices to Japan.

However, wherever we have focused on frozen vegetables, we have seen success. A case in point is frozen French Fries. In 2015 India was importing French Fries, but in 2019 we exported over 30,000 tonnes, mostly to ASEAN countries. We are also the third-largest exporter of Surimi paste, a product not known in the domestic market. The same success can be achieved in many other products.

Take the case of dehydrated vegetables. India is the fourth-largest exporter of dehydrated vegetables in the world, but our share is only $153 million compared to China’s $3.23 billion. South Korea does not appear in our list of top 10 dehydrated onion importing countries, although its population consumes the highest quantity per capita. Due to rise in commercial kitchens, the demand for dehydrated vegetables is rising fast and we should take a larger share.

In the last few years, consumers in affluent markets have moved to healthier diets and are consuming more plant-based products, but our exports are frozen in time. Even in areas of our traditional strengths, such as Ayurveda, it is the foreign companies which are launching new products to meet rising demand for health products. Last year, a Japanese start-up EaTreat launched two Ayurvedic tea blends.

Our record in the export of packaged food products is again much below potential, even in traditional Indian food. Our exports are limited to expatriate Indian population and we have made little attempt to reach out to wider population in target countries. Both in Japan and South Korea, curry-rice (introduced during British rule in India) is one of the most popular meals, but we have made no attempt to understand this market and introduce Indian products adapted to the taste and culinary traditions of these countries. You can find Javanese curry and Thai curry but not Indian curry.

India has the raw materials but not the product development know-how and marketing strategy or depth. Our export promotion councils have been provided a budget of a little over $1 million each annually for global marketing. We spent over $25 billion in the past five years in providing MEIS subsidy without appreciable increase in exports.

Investment of a fraction of this $25 billion in creating export marketing infrastructure would do wonders. Thailand has invested $2 billion in building ‘Food Innopolis’, an integrated food innovation platform for the growth of Thai agricultural exports in the next decade. Such infrastructure is missing in India.

It’s not the trade barriers which are holding up our exports, but our poor understanding of dynamic global trends and little investment in market research and product development. If we have to increase exports, we must invest more in such services infrastructure.

We have a global brand in yoga but have never leveraged its potential in health foods. The $550-billion RCEP eCommerce market (by 2025) presents a big opportunity but we are yet to devise a strategy or create infrastructure to enter these markets. The African market will change beyond recognition after the signing of African Continental Free Trade Agreement. As these illustrations have shown, we can do a lot to raise our exports from 1.6 percent of the global share to 3.5 percent by 2025 in spite of tariff barriers.

Suhayl Abidi is a consultant with Centre for VUCA Studies, Amity University. Manoj Joshi is Director, Centre for VUCA Studies, Amity University. Views are personal.