Indian government prepares to capitalise on new EU preferences
15 April 2012
With an EU–India FTA now seen as imminent, the Indian government is looking ‘to develop clusters of growers who will be trained in producing high quality, export standard vegetables’. This is likely to include the use of information technology to ensure greater food traceability. It is also thought, according to Indian press reports, that the Indian government is to establish ‘a minimum export price … to encourage the best producers to join the export clusters’.
This needs to be seen against the background of a resurgence in certain Indian horticultural exports which had previously been affected by the stricter application of SPS and food safety controls. Illustrative of this is the case of Maharashtra grape exports, which collapsed in 2009 following rejections of consignments on SPS and food safety grounds by UK inspection services.
The importance of this issue is highlighted by recent calls in Nigeria for the government to establish standards and inspection procedures prior to export, in order to ensure a reduction in the rejection of Nigerian consignments at the point of entry to the EU market and ‘to work with growers to address quality issues’. A critical issue is seen as the transportation and handling of agricultural products from farm to port.
Editorial comment
The Indian government is looking to set in place proactive initiatives to help Indian horticultural exporters to get to grips with EU SPS, food safety and general market requirements, in order to be able to capitalise on market opportunities which will be created through the entry into force of an FTA.
Given the scale of Indian production and the expatriate network which can be used in supporting market penetration, this could potentially pose a considerable challenge to ACP exporters: India is, for example, the world’s largest banana producer.
However, a full assessment of the extent of this challenge will require a detailed analysis of the new tariff concessions to be granted under the pending agreement and an identification of the specific areas of current and pending ACP exports where increased competition could arise, and adjustments to export strategies could be required.
In certain sectors, such as organic products, this may require specific ACP government initiatives to strengthen the local regulatory framework for organic production and secure mutual recognition from the EU, in order to reduce certification costs faced, and level the playing field vis-à-vis Indian exporters.
