Context:
• Recent India–U.S. and India–EU trade arrangements have reduced import duties on apples, raising concerns among apple growers in Jammu & Kashmir (J&K) about declining competitiveness and market pressures.
Key Highlights:
Trade Policy Changes
• India reduced the Basic Customs Duty on U.S. apples from 50% to 25%.
• A Minimum Import Price (MIP) of ₹80 per kg has been set.
• Under the India–EU trade arrangement, import duty on fresh fruits has been reduced to 20% under a Tariff Rate Quota (TRQ).
• The TRQ allows 50,000 tonnes of apple imports annually, which will increase to 1,00,000 tonnes over the next decade.
Importance of Apple Economy in J&K
• Apple cultivation accounts for about 50% of J&K’s horticulture output.
• The sector generates approximately ₹10,000 crore annually.
• Around 35 lakh people depend on apple cultivation for livelihood.
• J&K contributes over 70% of India’s apple production.
• In 2024, production reached about 21 lakh metric tonnes across 173.07 lakh hectares.
Competitiveness Concerns
• Apple yields in Western countries reach 40–70 tonnes per hectare, while India averages only 7–8 tonnes per hectare.
• Advanced mechanization, technology, and favourable geography give foreign producers a competitive advantage.
• Cheaper imports may reduce domestic apple prices, affecting orchardists and cold storage operators.
Infrastructure and Storage Issues
• Kashmir has 92 controlled-atmosphere cold storages with capacity of about 397.08 lakh metric tonnes.
• Lower market prices could affect stored apple inventories and profitability.
Policy Demands from Stakeholders
• J&K political parties and farmer groups have urged the government to:
• Reconsider duty reductions in trade deals.
• Provide interest-free loans under the Holistic Agriculture Development Programme (HADP).
• Expand cold storage infrastructure.
• Operationalize dry port projects for better export logistics.
Relevant Prelims Points:
• Basic Customs Duty (BCD): A tax levied on imported goods.
• Minimum Import Price (MIP): A floor price set to prevent cheap imports from undercutting domestic producers.
• Tariff Rate Quota (TRQ): Allows imports at lower tariffs up to a specified quantity, after which higher tariffs apply.
• Jammu & Kashmir produces over 70% of India’s apples.
• Holistic Agriculture Development Programme (HADP) aims to modernize agriculture in J&K through technology, infrastructure, and financial support.
Relevant Mains Points:
Significance of the Apple Sector
• Provides large-scale rural employment in J&K.
• Contributes significantly to regional GDP and agricultural exports.
• Supports allied industries such as packaging, storage, and transport.
Challenges from Trade Liberalisation
• Cheap imports may depress domestic prices, harming farmers.
• Productivity gaps between Indian and global producers reduce competitiveness.
• Infrastructure bottlenecks limit efficient market access.
Way Forward
• Invest in high-density plantation technology to improve productivity.
• Strengthen cold storage and logistics infrastructure.
• Provide financial and policy support for orchard modernization.
• Implement balanced trade policies that protect domestic farmers while honoring international agreements.
UPSC Relevance:
• GS Paper 3: Agriculture, Trade Policy, Horticulture Economy.
• GS Paper 2: International Trade Agreements and their Domestic Impacts.