China’s recent move to import Indian non-basmati rice and approvals to about 14 Indian companies for import are being seen as steps towards stabilising the Sino-India rice trade, which had been fluctuating in the past. However, food safety requirement is a big hurdle towards achieving a stable long-term trade perspective, and India needs to maintain a formidable plan for the same.
Arpita Mukherjee, professor, Indian Council for Research on International Economic Relations (ICRIER), said, “If we are able to export to China, this is definitely a good move. However, as can be seen from the data, our exports have a fluctuating trend, and this is because we may not be meeting the food safety conditions.”
“What is more important from India’s long-term trade perspective is to have steady exports. This is only possible when we are able to meet the food safety regulations of the importing countries. We have enough production for export, and this is not going to impact the domestic availability of rice. Not being able to export is going to impact farmers’ incomes,” she added.
India-China rice trade
India’s rice exports to China have seen a fluctuating trend over the last couple of years. However, the imports of rice from China have been quite low vis-a-vis exports, thus leading to a positive trade balance in rice exports to China. Import data for the years 2012, 2013, 2015 and 2017 are missing in the World Integrated Trade Solutions (WITS) database.
As such, import data for the years 2014 and 2016 are depicted through a table, and the exports data from 2012 to 2017 are depicted through a graph.
Exports of rice from India to China between 2012 and 2017
India’s imports of rice from China (2014 and 2016)
|
Years
|
Imports
($
million)
|
|
2014
|
103
|
|
2016
|
1,011
|
China specifically has concerns about pests. “The consignments have to comply with the Chinese plant quarantine laws and regulations, said Mukherjee, adding, “For this, there is a need for more interaction and sharing of information between the Indian Directorate of Plant Protection, Quarantine and Storage, under the Ministry of Agriculture and Farmers’ Welfare, Government of India, and the Chinese authorities.”
“There is need for the Ministry of Agriculture and Farmers’ Welfare to focus on ensuring that the food safety standards at the farm level are in line with the global best practices and help to maintain the quality standards,” she said.
Commenting on the subject, K Singaravadivel, independent director, Tamil Nadu Food Grains Marketing Yard, Madurai ,said, "The move to export Indian rice to China will be positive. There will be no bad impact on the country.“
“Talking to about Tamil Nadu, the state is expecting more production of rice this year. So, there will be no impact if rice is exported to China. In fact, farmers will get a good share for their produce,” he added.
“However, the Chinese and even Japanese people prefer sticky rice to the other variant. The simple reason for it is they can eat it using chopsticks. This type of variant is grown and available in the North-Eastern region of India. So, if the doors for exports open, farmers from this region will benefit. However, we need to see if the farmers get a fair rate for their produce,” Singaravadivel stated.
China has agreed to import rice from 14 registered rice exporters from India. Currently, the former only allows import of basmati rice from the latter but with this clearance, non-basmati rice can be exported too.
The clearance came amid rising tension between the United States and China over trade tariffs. China is looking for newer markets to boost its inventories, while exports from India have been delayed, as it failed to clear the Chinese food safety and quality norms.
Non-basmati rice exports from the country between April 2017 and February 2018 stood at $3.26 billion as against $2.53 billion in 2016-17. India wants to increase exports to China with a view to bridging the increasing trade deficit, which has increased to $63.12 billion in 2017-18 from $51.08 billion in the previous fiscal.