cts (31%) and commodities (13%). In recent years, some agricultural exports (e.g., rice and wheat) have witnessed sharp swings depending on the size of the crop and domestic demand.
Since the late-1990s, India's agricultural imports are growing at a much faster rate than exports. Research suggests that post-WTO regime has been more favourable for agricultural imports than exports.
India's agricultural trade with EU is expected to get a tremendous boost with the signing of bilateral trade agreement. The EU is India's largest agricultural export market. Currently, India enjoys a small surplus in its agricultural trade with the EU. India's major agricultural exports to the EU include rice, cashew nuts, coffee, tea and castor oil. Many of these products enter the EU market either duty free (e.g., basmati rice) or with a lower tariff (e.g., 6% for oils). India's major agri-food imports from EU include wheat, Scotch whisky, dried peas, vegetable seeds, wine and olive oil. During 2004-07, wheat was India's top agricultural import from the EU.
The Lure of Affluent Consumer Market 富裕消费市场的诱惑
There are several factors which make India an alluring destination for European agricultural exports and investments. Some of the key pull factors include a large and growing consumer market (India's middle class is already larger than the population of the US), greater expenditures on high-value processed food, more exposure to Western-style cuisine, and growing consumption of imported foods or multinational-branded foods made in India.
In particular, middle- and upper-class consumers residing in metropolitan cities (Mumbai, Kolkata, Chennai and New Delhi) are the key potential customers for European agricultural exporters and investors. Given the saturated European and North American agricultural and food markets, India's affluent urban population is a potentially huge market for EU exports and investments. The urban India is witnessing a boom in demand for dairy products (such as processed milk, cheese, butter and yogurt) due to changing food preferences.
The Tariff Tangle 关税纠纷
The European exporters view India's relatively higher applied tariff rates as a major impediment to EU agricultural exports because higher rates raise the price of imported European products.
In the past, India had imposed higher tariffs and other restrictions to protect its agricultural sector.
However, the average applied tariff rates on agricultural products declined considerably from 113 percent in 1991 to 34 percent in 2007. The current applied tariff rates vary substantially (0 to 150 percent) by products. At the end of the Uruguay Round, India had bound its tariffs on most agricultural products. India's average bound tariff (maximum applicable rates) for agriculture products is 114 percent. But there are significant differences between bound and applied tariffs (see Table 1).
The EU exporters have raised concerns over the large difference between higher bound tariff rates and lower applied tariff rates for many agricultural products which enables India to alter its applied tariffs without violating the WTO commitments. They consider tariff-rate variability as a major obstacle in European agricultural exports to India. However, from an Indian perspective, the flexibility to adjust tariff rates is very important to balance the interests of farmer
