India's economic strategies are taking significant turns as the nation embraces sustainable export initiatives alongside engaging with global value chains. Recent reports forecast India’s castor oil exports could swell to USD 2.5 billion by 2030 if sustainable farming practices, endorsed by the Sustainable Castor Association (SCA), are widely adopted.
Speaking at the SCA's international roundtable meeting held last week in Mumbai, Director Abhay Udeshi emphasized the need for the farming community to adopt the "SuCCESS Code." This independently auditable code for castor farming not only propels sustainability but also focuses on restoring soil health. "There is huge demand for castor oil in the global markets. We are looking at an export of USD 2.5 billion by 2030. Use of these codes will help farmers increase production and their income," Udeshi remarked, highlighting the international dependency on India, the world’s largest producer and exporter of castor oil. The commodity serves diverse industrial applications, including paints, varnish, and plastics.
During the current fiscal year from April to December, India’s income from castor oil exports reached approximately USD 715 million, with Gujarat and Rajasthan being the primary states for castor seed cultivation. Udeshi pointed out major markets including China, France, Germany, and Mexico, to which Indian castor oil is exported. He also noted adapting to high European Union standards is becoming increasingly important. "SuCCESS-certified farms have demonstrated benefits such as cost reduction, crop yield increase, and increase in overall farmer income compared to conventional farming," Udeshi added.
Meanwhile, C Veeramani of the Centre for Development Studies (CDS) has proposed another growth path for India, inspired by China’s economic strategy. Speaking during the First Development Researchers Day, he stated the key to advancing India's economic status is enhancing labour productivity. He noted the stark comparison where China's GDP per capita is currently $12,614, nearing the World Bank's high-income threshold of $14,005, whereas India mirrors China's 2007 economic appearance. "Domestic markets alone cannot drive medium-term growth, considering the increasing debt burden for households, firms, and the government," Veeramani observed, stressing the need for outward engagement through Global Value Chains (GVCs).
Veeramani explained the dichotomy between promoting local linkages for domestic industries versus participating within GVCs characterized by globally dispersed connections. The way forward, according to him, depends on the impact of these strategies on domestic value addition, productivity, and employment rates. He elaborated on two participation modes—backward and forward. Backward GVC participation involves utilizing imported goods to produce exports, whereas forward participation refers to exporting raw materials for processing abroad.
To handle current economic challenges, Veeramani suggested the potential of subsidized programs, noting, "Targeted subsidies can offset high effective costs and encourage GVC participation... For example, the PLI scheme for phone manufacturing provides such incentives." He also mentioned the importance of allowing markets to operate freely without overly direct government intervention, pointing out how ineffective industrial policies result in misallocations and inefficiencies.
India finds itself grappling with infrastructure bottlenecks and high service-linked costs, complicative factors for participating effectively within GVCs. The challenges call for comprehensive reforms aimed not just at boosting specific sectors but improving the overall economic environment, ensuring stability, and fair competition for all market players. The future hinges on whether India can adopt sustainable practices within agriculture, like castor oil production, and determine its role effectively within the global economy.
By integrating sustainable growth principles with strategic economic frameworks, India is not just setting its market to thrive but also paving the way for global competitiveness, possibly enabling it to achieve high-income status by the next quarter-century.