Global Trade of Indian Pulses during WTO Regime: International Trade Trends, World Markets & Foreign Trade Policy

Abstract

Global trade of pulse crops represents about 15% of global production. The total volume of imports and exports globally has increased by 50% over the last 14 years from 4.4 to 6.7 million. The gap between the supply and demand in 2016 has shot up prices of most pulses beyond the reach of even middle class. It is against this background, when the United Nations General Assembly has declared the year 2016 as the international year of pulses. Even though India is the largest pulses producer of the world, it imports large amount of pulses from rest of the world. So, it is important to analyse, how the inflow and outflow of pulses from India is changed over the period of time and why India is importing a considerable amount of pulses. This study analyzes India’s pulses growth rates, elasticity’s, instability, price and trade trends across global regions and countries, and recommends government to frame agriculture policies. The study period is 1990-2017. The study observed that import markets are shifting from developing to developed nations. Also, the export and import quantity growth rates have been positive for all the regions during 1990-91 to 2016-17. The maximum export and import quantity growth rate is witnessed for African and American region respectively. The export and import price elasticity of Indian pulses is positive among all the regions, indicating the high responsiveness of quantities to change in prices in international markets. During the study period, export price of all major pulses were more than import prices indicating that India has comparative advantage in pulses. It is also noticed that export as well as import prices of all pulses were found to be unstable. The study found that, the total pulses, export price elasticities for all regions is elastic, whereas the import price elasticities is also elastic except for Asia and Oceania. India is importing from Canada, Myanmar, Australia, Russia and USA and exporting to Sri Lanka, Pakistan, Bangladesh, Egypt and Saudi Arabia. The study suggest that Import from inelastic countries should be exempted from any ban which would help to boost the trade and treat under MFN status. Under MEIS, pulses should be included and trade exemptions should be reconsider towards those countries which have shown elastic in both export and import. Multilateral trade relationship with high CAGR countries would help in smooth trade of pulses