Indian Trade Restrictions Anticipated to Reduce Exports by $4 Billion; Source Warns of Potential Red Sea Attacks
Published on: December 21, 2023.
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India’s Exports Face Shortfall Due to Trade Restrictions on Wheat, Rice, and Sugar
India’s exports are expected to fall short by approximately $4 billion to $5 billion this year due to the government’s imposition of trade restrictions on wheat, rice, and sugar. These measures were implemented to control the rising domestic prices of these commodities. Additionally, basmati rice shipments may be further affected by attacks in the Red Sea.
As the world’s second-largest producer of wheat, rice, and sugar, India has imposed limits on their exports. If attacks by Yemen’s Houthi group continue, India may consider an alternate route through Africa for basmati rice shipments. This, however, could lead to a price increase of around 15% to 20%.
The potential impact of the alternate route extends beyond basmati rice exports to Egypt and Europe. India’s shipments of long-grain rice may also be affected. These concerns were shared by an anonymous source who was not authorized to speak on the matter.
Despite the export deficit caused by restrictions on sugar, wheat, and rice, the Indian government expects growth in exports of other agricultural commodities to compensate. According to Rajesh Agarwal, an additional secretary in the trade ministry, exports in categories such as meat and dairy, cereal preparations, and fruits and vegetables have seen positive growth.
Data from the Agricultural and Processed Food Products Export Development Authority (APEDA) supports this claim, showing an increase in exports of the aforementioned products between April and November of this year.
In conclusion, while India may face a shortfall in its total exports this year, the government remains optimistic that growth in other sectors will help meet last year’s export levels.
Source: [Marketscreener.com](https://www.marketscreener.com)
