Food Imports in India: Prospects, Issues and Way Forward

Arpita Mukherjee (Indian Council For Research On International Economic Relations (ICRIER))
Divya Satija (Indian Council For Research On International Economic Relations (ICRIER))
Soham Sinha (Indian Council For Research On International Economic Relations (ICRIER))
Angana Parashar Sarma (Indian Council For Research On International Economic Relations (ICRIER))

Article ID: 841

DOI: https://doi.org/10.30564/jesr.v2i3.841

Abstract


India is one of the fastest growing markets in the world. Among the various sectors contributing to the growth of the economy, food is one of the fastest growing sectors owing to factors such as a large population base, rising middle-class, increase in per-capita income, and greater consumer awareness. Demand for imported food products is increasing due to factors such as reduction in tariffs, changes in consumer preferences and growing adaptability to international cuisine. Several initiatives have been taken by the Indian government in recent years to improve the ease of doing business and reduce the compliance burden through use of technology. Despite these initiatives, India’s ranking compared to other countries in some selective indicators such as documentary and border compliance and logistics performance is quite low. To improve ease of doing business, reduce cost and time taken in importing food products, and improve India’s ranking in logistics performance indicators, there is an urgent need for backend process and information technology (IT) integration across the agencies involved in the import clearance process. Given this background, the objective of this paper is to (a) provide an overview of the food import clearance process in India, (b) identify issues in the import process and (c) make recommendations on how to streamline the process using technology and automation. The paper is based on a survey of key stakeholders engaged in the food import clearance process. 

Based on a primary survey of 150 stakeholders in the United Kingdom and India, this paper finds that while India is an attractive market for importing food; low penetration of technology in the food import clearance process, lack of inter-agency coordination, and lack of risk management systems impedes the ease of importing food products into India. This paper recommends that in order to enhance ease of doing business, especially for SMEs, there is need to reduce procedural barriers by implementing technology and automation-oriented solutions, and a robust risk management system. In addition, there is a need to conduct continuous regulatory impact analysis to assess the time and cost reduction in importing food into India.

JEL classification: F10, F13, L66, O38


Keywords


Trade; Policy; Technology; Food; India; Ease of doing business

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References


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