UK-India trade deal: Prospects for agriculture

India was the fifth largest global beef producer, based on the 2018-2020 average, ahead of Australia and Argentina. Despite, the traditional notion that India is mainly a vegetarian country, a recent report by Natarajan and Jacob[1] claims that the extent to which this is true may be exaggerated. The report estimates that only 20% of Indians are vegetarian, with ‘cultural and political pressures’ leading to the under-reporting of eating meat. India’s main religion is Hinduism, which considers the cow to be sacred, but Natrajan and Jacob’s work estimates that 15% of India’s population (or 180 million Indians) consume beef, which is 96% higher than official figures.

India’s main export destinations for beef are in South-East Asia, the Middle East and Egypt. India’s main competitor for these markets is Australia. Indian cattle are mainly raised on natural feed so costs are lower compared with systems that use antibiotics, growth enhancers and hormones. However, the Indian beef sector has obstacles, such as bans on the sales of live cows for slaughter to contend with, as well as the general preference of Australian beef.

[1] (PDF) 'Provincialising' Vegetarianism Putting Indian Food Habits in Their Place (researchgate.net)

India’s sheep meat production is at a similar level to that in the UK, however, consumption per capita is lower. In 2020, Indian sheep meat consumption was estimated at 0.5 Kg per capita, whereas for the UK this figure was 3.9 Kg per capita (OECD).

As the table above shows, India’s exports of sheep meat are only around a sixth of the figure for the UK, although there are negligible Indian sheep meat imports.

India’s main export products are fresh/chilled sheep carcases. It is difficult to source data for Indian sheep meat export destinations, but for sheep and goat meat, the Middle-East is the main market.   

India’s average pig meat production from 2018 to 2020 was around 370,000 tonnes, and less than half of UK production over a similar timeframe. Consumption of pig meat in India was 0.2 Kg per capita in 2020 (OECD) compared with 15.8 Kg per capita for the UK. The Indian pig sector has been described as ‘highly unorganised’ and the majority of pigs are reared in small scale settings. The number of semi-commercial pig farms is limited.

Another issue is that India’s pig breeds are unsuitable for high quality pork production. To improve this situation, the state of Maharashtra is planning to import Canadian pigs but it will take time for numbers to develop to make a significant difference to the sector.

India is the world’s largest liquid milk producer with average output at over 190 million tonnes. Liquid milk is the most widely consumed dairy product in India and accounted for almost two thirds of the market share (by value) of Indian dairy consumption in 2017.

The graph below shows that Indian dairy consumption per capita mainly comprises fresh, rather than processed products. In the past decade, however, there have been signs of a shift towards processed, value added products such as cheese, yogurt and flavoured milk.

India is not a major dairy exporter and out of the small dairy products it does export, butter is predominant followed by milk powder. The main export destinations for India’s dairy products are Bhutan, Bangladesh and the United Arab Emirates.

Lactose and whey powder are the main Indian dairy imports. Lactose is used in the food and pharmaceutical sectors, including the production of baby milk formula. The main import origins are France, Turkey, Norway and Germany.

India has high tariffs on dairy imports and in 2019 had the second highest average final bound tariffs on dairy products in the world (after Pakistan).

In terms of grains, India’s main product is rice and the country is the world’s second largest producer of rice after China. India is also the world’s second largest wheat producer after China but, like China, is not a key exporter as most of the crop is domestically consumed.

Nepal, Bangladesh and Afghanistan are the main export destinations for the India’s relatively small exportable surplus of wheat.

Barley is grown at a much smaller scale compared to wheat and maize in India Around 80% is used for animal feed and 20% is used for human consumption, including malting and brewing. The state of Rajastan, which has a strong livestock industry, is the main barley producing state in India. There is potential for higher malting barley demand in India from the emerging middle class which could lead to opportunities for the main global barley exporters. Argentina and France are the main origins for Indian barley imports.

After rice and wheat, maize is the third largest crop that is grown in India. The majority of domestic consumption is for animal feed. Ethanol production is also likely to become an increasing source of demand for maize as India’s 2025 Ethanol Roadmap seems to favour food crops such as maize for ethanol production rather than second generation waste products. The use of grains such as maize in ethanol production is predicted to increase four-fold by 2025, although this is considered to be rather optimistic. India is a net exporter of maize, with Bangladesh and Nepal the main export destinations.