Pattern of foreign trade and export competitiveness of Indian cashew

Abstract

The Indian Cashew industry provides employment to more than 5 lakh people both directly and indirectly, particularly in the rural areas. The total earnings from export of cashew kernel and cashew nut shell liquid have increased from 2,053.49 crores in 2000-01 to` 5,488.66 crores in 2014-15. India is facing tough competition from Vietnam and Brazil in the exports of Cashew Kernels. The NPC for the period 2015-16 under exportable hypothesis USA, UAE and Netherlands were 0.85, 0.93 and 0.87 respectively and they were less than one, which also revealed that the domestic prices received by the farmers were lower than the international prices, which also implied that the domestic producers were dis-protected or rather taxed compared to a situation prevailing under free trade condition. USA was one of the most stable country among the major importers both of Indian cashew kernel and cashew nut shell liquid as indicated by the high retention probability of 0.765 and 90.10% respectively. The major competitors for India in the world market are Vietnam and Brazil. A dependency on one or two export market would increase the trade risk in the near future. Hence, appropriate export promotion strategies are to be evolved to diversify the geographical concentration.