Government’s Move Aims to Stabilize Supply and Prices in the Indian Market
In response to escalating potato prices across India, the Indian government has extended the unlicensed import of potatoes from Bhutan until June 30, 2027. This decision, announced on July 5, 2024, by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry, reflects ongoing efforts to stabilize the potato market amid significant supply challenges.
The initial extension of unlicensed imports, which was granted in July 2023 for one year, has now been prolonged by three additional years. This policy is expected to support potato supplies in Northwestern Indian states such as Tripura and Assam, which have been grappling with high prices and supply issues.
In the fiscal year 2022-23, India’s potato imports from Bhutan amounted to USD 1.02 million. This import channel is particularly vital for regions like Tripura and Assam, where local efforts to control prices and ensure steady supply are critical.
The extension comes in the wake of reports indicating that Bhutan’s government is exploring new export markets in Nepal and Bangladesh. The Bhutanese Ministry of Agriculture and Livestock (MoAL) aims to diversify export destinations to mitigate the impact of price fluctuations in the Indian market on local farmers. Currently, Bhutan’s potato exports are primarily directed towards India, where domestic production heavily influences pricing.
India’s potato production for the 2023-24 season was approximately 59 million tons, a decrease of about one million tons from the previous year. This reduction, combined with severe summer heat disrupting transportation and causing spoilage, has led to record-high potato prices and shortages in various regions. Notably, West Bengal, the second-largest potato-producing state in India, has implemented a ban on potato exports to other states, exacerbating supply issues.
In response, the West Bengal Cold Storage Association has provided potatoes at INR 26 (USD 0.31) per kg to the state government, compared to the INR 40 (USD 0.48) market price. The state government has set up temporary fair-price shops selling potatoes at this reduced rate. Similarly, Tripura has established fair-price shops in Agartala, offering potatoes at INR 35 (USD 0.42) per kg.
India has also increased its export quota of essential commodities, including potatoes, to the Maldives by 5% for the 2024-25 period. The country’s major potato export markets include Nepal (USD 48.9 million), Oman (USD 10.2 million), Saudi Arabia (USD 8.63 million), Indonesia (USD 7.7 million), and Malaysia (USD 6.71 million). In 2022, India imported potatoes worth USD 1.09 million, predominantly from Bhutan.
This extended import policy is expected to help stabilize domestic potato prices and ensure a more consistent supply in the Indian market.
