Apeda figures low in fiscal support even as India looks to sign FTAs

Comparatively modest expenses on salaries and establishment could be a reason

As India looks to sign bilateral trade agreements with countries across the globe, the latest being with Israel, an analysis of the budgets of its agriculture-centric trade-promotion bodies shows that the Agricultural and Processed Food Products Export Development Authority (Apeda), which handles the highest amount of farm export, has got the least increase in budgetary support over the last decade. 

Such bodies play a vital role in trade negotiations. Apeda, according to trade estimates, exported agricultural products worth around ₹2.08 trillion in 2023-34 (FY24). 

One reason for low budgetary support could be that a significant part of the funds that boards other Apeda, such as the Coffee Board or Spices Board, get is spent on salaries and maintaining the establishment, according to their Budget documents and Annual Reports. 

In the case of the Tea Board in FY24, such expenses were around 69 per cent, while they were 64 per cent for the Coffee Board.  For the Spices Board, in FY24 they were almost 40 per cent while for the Marine Products Export Development Authority the figure was around 59 per cent. For Apeda, in the same financial year, they were around 23 per cent. 

Apeda had recently advertised for a number of positions and recruited consultants and young professionals, which could perhaps inflate this percentage when the updated figures are available. 

Globally, China, which is India’s competitor in several fields, has a dedicated export agency for agriculture called the Agriculture Trade Promotion Centre. Its budget in 2024 (calendar year) was around $10.5 million (around ₹92 crore) but it handled exports of $103 billion. 

China exports a variety of agricultural items, including fruit and processed vegetables, whose value is higher than that of grains. China gets a manufacturing advantage in processed food. 

Other major trade-promotion bodies such as ProChile, ProMexico, ProComer, ApexBrazil, VieTrade, and Thai Export Center are agencies whose job is to promote various kinds of products, not just agricultural. Moreover, these don’t have any regulatory functions. 

The global market for agricultural and processed food was worth around $1.7 trillion in FY24. Of that, the United States’ share was $191 billion (in 2024 calendar), Brazil’s was $164 billion, and the Netherlands’ was around $134 billion. The Netherlands exports about 70 per cent of its farm commodities to European countries. Its trade promotion body, RVO, is innovative and does promotion. 

China’s agricultural exports are worth around $103 billion while in FY25 it was $52 billion for India. 

“The idea and concept of export promotion is undergoing a paradigm shift. The Netherlands’ tomato production uses high-wire, climate-controlled greenhouses with supplemental or artificial lighting, enabling nine- to 11-month production cycles and winter supply. Its competitors, such as Spain and Armenia, are unable to supply and compete with it in the German market. Tomatoes from the Netherlands excel in uniformity, shelf life, firmness, damage resistance, year-round supply, and consistency. As export competitiveness continuously evolves due to the emerging technology, the work plan, budget and schemes of export-promotion agencies need to be aligned with the current market environment,” said S Chandrasekaran, leading trade-policy analyst and author of Basmati Rice: The Natural History Geographical Indications.