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Indian Express

30-October-2023

1) Restrictive Export Policies Impacting Agriculture

Context:

  • Restrictive export regulations have been implemented by the Indian government in an attempt to contain food inflation ahead of the next state elections.
  • This has a negative impact on agriculture, especially basmati rice.
  • Although the goal of these steps is to keep inflation from becoming a political hot button, more research is needed to fully understand how they will affect global markets and the agriculture industry.

Basmati Rice Export Restrictions

  • For basmati rice, an expensive kind mainly consumed by the upper middle class and sold to Gulf countries, Europe, and the US, the government has set a minimum export price (MEP) of $1,200 per tonne.
  • Since Punjab and Haryana are the main producers, farmers there have suffered from lower prices as a result of the decision to set a high MEP, which has effectively limited basmati exports.
  • In effect, the domestic upper-income urban class benefits at the expense of these farmers.
  • Furthermore, by making this move, India runs the risk of losing its export markets to Pakistan, which is the only major rival for basmati rice.

Inadequate and Unstable Export Policies

  • Export restrictions, in the form of export tariffs or export bans, apply not only to basmati rice but also to broken rice, non-basmati white rice, and parboiled rice.
  • These policies don’t seem planned as they look unsteady and reactive.
  • Approximately 40% of worldwide rice exports in 2022–2023 came from India, making it the largest exporter in the world.
  • But these bans on rice exports, particularly non-basmati white rice, hurt India’s reputation internationally and make it more difficult for it to lead other countries.

Challenges in Doubling Agri-Exports

  • The analysis shows that India’s agricultural exports have fallen short of the government’s lofty target of tripling agri-exports.
  • Agri-exports increased significantly from $8.67 billion in 2004–05 to $43.27 billion in 2013–14, the final year of the UPA government.
  • It is unlikely, nonetheless, that India’s agri-exports will even approach $50 billion in 2023–2024.
  • The implementation of export restrictions that harm farmers while benefiting domestic customers is a major contributing factor to this failure.

What Should be done?

  • There is a need for a more focused strategy that concentrates on assisting vulnerable segments of society through domestic income measures, as opposed to enacting restrictive export laws to support domestic consumers.
  • Even if they appear to be good for farmers and consumers, India’s large subsidies, debt waivers, free power, and other populist policies may not be the best ways to ensure long-term agricultural competitiveness.
  • India must prioritize funding for agricultural research and development (R&D), better farming practices, including precision agriculture, improved seeds, irrigation, fertilizers, and better farming equipment in order to increase agricultural competitiveness and exports.
  • With just 0.5% of the agri-GDP going toward research and development, present levels of investment in this area are inadequate.
  • In order for India to become a global leader in agricultural output and exports, this investment must be doubled or tripled.

Way Forward:

  • In conclusion, the competitiveness and health of the agriculture industry are being impacted by the restrictive export regulations that are a result of populist initiatives.
  • In order to showcase its ability to create, produce, and export goods at a competitive rate, India needs to reevaluate its agri-export policies and investments in agricultural research and development.

2) Shifting Dynamics in India's Middle East Policy

Context:

  • India’s stance on Middle East affairs has changed significantly as seen by its recent decision to abstain from the UN General Assembly resolution on the Gaza war and its backing of a Canadian amendment denouncing Hamas.
  • This shift indicates a new strategy based on a realistic assessment of the changing regional dynamics and India’s long-term interests, notably with regard to terrorism, rather than abandoning the Palestinian cause.

A Departure from Traditional Diplomacy

  • Historically, India has consistently supported Arab resolutions opposing Israel and shied away from confronting the problem of Arab-inspired terrorism.
  • Nonetheless, India has prioritized its worries about international terrorism without sacrificing its support for a two-state solution in Palestine with its most recent UNGA vote.
  • This change represents a break from political correctness and conventional diplomatic formalism.

Three Dimensions of India’s Diplomatic Task

  • Outreach to the Arab World:
  • The recent phone calls by Prime Minister Narendra Modi to moderate Arab leaders are a positive first step towards strengthening India’s engagement with the Arab world.
  • In addition to strengthening government-to-government ties, India should also expand its diplomatic outreach to the Arab world, which is deeply concerned about Gaza and should reiterate its commitment to Palestinian statehood and adherence to the laws of war.

2)    Engagement with Opposition Leaders:

  • Opposition leaders should be invited by the government to a thorough briefing on the factors influencing its regional policy.
  • It’s time for an update on the opposition’s out-of-date Middle East policy.
  • The necessity of shielding local politics from the Middle East situation is highlighted by recent explosions in Kerala.
  • Addressing Extremist Groups:
  • India has to take strong action against extremist organizations that participate in cyberattacks against Hamas and distribute false information in support of Israel.
  • Fringe organizations should not undermine the government’s well-crafted interest-based realism policy in the Middle East.

Way Forward:

  • In conclusion, India is departing from traditional diplomacy with its changing Middle East policy, which is marked by a more pragmatic approach.
  • Protecting India’s interests in the area is crucial, as is making sure that the complicated and unstable dynamics of the Middle East are approached with balance and knowledge.

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