Archive · 12 Jun 2025
India's Agri-Export Strategy: Growing Crops vs. Building Value
Imagine India grows lots of crops, like tobacco.
They sell a lot of it, but mostly as raw materials.
Other countries then make these into fancy products and sell them for more money.
The article says India should also make the fancy products to earn more money.
Right now, India grows the crops, but others make the products.
This means India misses out on making a lot more money.
The author wants India to change how it works so they can sell the finished products too.
This includes improving how they turn crops into products and making it easier to sell them to other countries.
India is a major agricultural producer, often exporting raw materials rather than value-added products.
India is the second-largest tobacco producer globally but has a small share (5%) of the global tobacco leaf trade value.
Countries like Italy and the UAE, with less production, dominate the high-value segments of the tobacco market.
India's economic model often ends at the farm gate, missing out on the most profitable parts of the value chain.
The article calls for a policy shift to invest in value chains and enable innovative exports.
- Who
- Dr. Manish Kumar, Head, Dept of Economics, Easwari School of Liberal Arts, SRM University AP, Amravati and Yaswanth Kumar Chidipothu, Chairman of the Tobacco Board of India
- What
- India's potential to increase profits by exporting value-added agricultural products, particularly tobacco.
- When
- FY 2023-24
- Where
- India
- Why
- India is missing out on profits because it exports raw materials instead of value-added products.
Current Approach
Proposed Shift
Value Chain Strategy
Current Approach
Focus on growing crops and exporting raw materials.
Proposed Shift
Prioritize value addition through processing, branding, and export transformation.
- Tobacco Production (India)
- 800 million kilograms annually
- Tobacco Export Revenue (FY23-24)
- ₹12,006 crore (approx. $1.45 billion)
- India's Share of Global Tobacco Leaf Trade
- 5%
- Global Trade in High-Value Tobacco Products (HSN 240411) in 2023
- $5 billion