Horticultural Exports during the Post-WTO Regime

Horticultural commodities are becoming an increasingly important source of export earnings for a number of countries. India has taken a number of measures to boost the export of horticultural commodities. World Trade Organization (WTO) came into being on 1 January 1995, and this marked the beginning of a new era of international trade. Initially, it was expected that India would be a net beneficiary under this trade regime with greater access to the world market. Therefore, an attempt was made to examine the changing pattern in the commodity basket, comparative advantage and direction of trade in horticultural commodities in the post reform period. A total of 132 items registered an increase, both in quantity and value terms in the post-WTO period. The share of these commodities increased to 83 per cent in post-WTO period from a level of 67 per cent in pre-WTO period. All these commodities were classified into two broad categories on the basis of their value elasticities (EV) - (a) commodities with EV greater than unity, and (b) commodities with EV less than unity. It is relatively more paying to put export promotion efforts on the former category of exportables rather than the latter. The country continues to have comparative advantage in a number of horticultural commodities over the period. Contrary to the general perception, it was revealed that India does not have comparative advantage in a large number of horticultural commodities. In order to improve the comparative advantage, it is necessary to reduce the cost of production, improve productivity, create efficient post-harvest management and processing, provide infrastructural facilities and policy support. Processed horticultural commodities were exported mainly to developed nations especially Europe, America, Japan, and the UK, whereas fresh fruits & vegetables found greater share of markets in Gulf countries, ASEAN and SARRC nations. Future export promotion efforts must encourage adherence to quality standards by following good manufacturing practices (GMP), HACCP and SPS standards.