PESTEL INSIDE OUT

Page 1

FLORICULTURE CLUSTER IN PUNE, INDIA

PESTEL By Laura Dos Santos Sarah Gay Saki Hanzawa

& Louise Penin


Contents Introduction ............................................................................................................................................................................................... 2 i.

Context ............................................................................................................................................................................................... 2 1. India & maharashtra ..................................................................................................................................................................... 2 a. India .............................................................................................................................................................................................. 2 b.

Maharashtra state ................................................................................................................................................................... 3

2. The floriculture world market ........................................................................................................................................................ 3 3. The floriculture cluster .................................................................................................................................................................... 4 4. Other cluster actors ....................................................................................................................................................................... 5 ii.

Pestel analysis .................................................................................................................................................................................... 6 1. Politics............................................................................................................................................................................................... 6 a. Political organisms and interventions ...................................................................................................................................... 6 b.

Subsidiaries ............................................................................................................................................................................... 6

c. Export policies: monetary policy and exportation restrictions ............................................................................................ 7 2. Economics ....................................................................................................................................................................................... 8 a. Exportations ................................................................................................................................................................................. 8 b.

The floral industry is a growing market ................................................................................................................................. 9

c. Low cost ....................................................................................................................................................................................... 9 3. Social .............................................................................................................................................................................................. 10 a. Cheap labour, bad social protection ................................................................................................................................... 10 b.

Inequality ................................................................................................................................................................................ 10 i


c. Low urbanization ....................................................................................................................................................................... 10 4. Technologic .................................................................................................................................................................................. 10 a. Research infrastructure ............................................................................................................................................................ 10 b.

Technologies around the floriculture ................................................................................................................................. 11

5. Environmental ............................................................................................................................................................................... 12

a. The climate ................................................................................................................................................................................ 12 b.

The consumer behavior........................................................................................................................................................ 13

c. The green revolution ................................................................................................................................................................ 13 d.

The green agriculture ........................................................................................................................................................... 14

e. The green technologies ........................................................................................................................................................... 15 6. Legal ............................................................................................................................................................................................... 16 a. Indian legal system ................................................................................................................................................................... 16 b.

Agricultural legislation........................................................................................................................................................... 16

c. Regulations of export ............................................................................................................................................................... 17 references................................................................................................................................................................................................ 18

ii


PESTEL a definition Understand the factors which can have a positive or negative influence on your sector in order to answer better to the expectations

1


. INSIDE

OUT©

is

a

consultancy

agency

specialized

in

1 .

&

sustainable development issues. The office is based in Pune, in

.

India. It gathers four high skilled consultants who have knowledge of the local economy nearby. The agency is

India is the second largest and most populous country in the

particularly interested in helping the Pune‟s floriculture cluster

world with 1,241 billion inhabitants (World Bank, 2013). It‟s an

so it launched a study about it in January 2013.

emerging country with 1,848 trillion dollars PIB (World Bank,

Why

floriculture

cluster

?

Because

of

its

2013) and a 5.5% growth (Le Monde, 2013). This growth, which

economics,

environmental and social stakes in Pune, but also in India and

seems to be high, has fallen regarding the 8.5% of 2010.

abroad. This study will show all the involvements of the cluster

India is growing but

in its background.

remains

In a first part, the context of our researches will be introduced

country.

by a country and state portrait, a delimitation of the subject

misunderstand, it‟s a

and a brief description of the cluster. In a second part, the

country full of raw and

PESTEL method will fix the cluster framework.

human

a

poor Don‟t

resources,

nevertheless, inequalities are so important they lead to instability. From another

side,

this

inequality means having

2


both educated workers and low cost workforce on the same

GMO plants like Monsanto‟s Bt cotton (Greenpeace France,

territory;

2013).

and India takes advantage of this situation,

especially in floriculture cluster.

.

Politically, the government is very implicated in the economy

In India, Maharashtra state is the wealthiest state with 13.3% of

and work hard to stimulate the growth. And it just did launch a

its GPD. Mumbai is its capital city and Pune is the second one.

new growth plan in this way during the past few months. For

Established in 1960 for linguistic purpose, official language is

the moment, the INC (Indian National Congress), a centre-left

Marathi The state, and particularly Pune, has built a network of

wing party, is in power, and even if opposition said them to be

educational institutions in order to educate the population

demagogic and preparing the next election in 2014, it‟s

and develop high skilled talents. Amongst them, there are 4

without a doubt an ambitious plan (Detroy, 2012). This plan is

Agriculture Universities.

built around three axes: tax reform, investments opening and

Regarding floriculture, “Maharashtra is a bio-diverse state with

liberalization of the economy. This last point will be reviewed

9 agro climatic zones and varying soil types, suitable for

more precisely in the analysis but, whatever it is, even more liberalistic

stakeholders

recognize

the

action

of

agricultural development” (NPCS, 2013). The state is number

the

one in the production, consumption and export of flowers.

government. The sustainable development is not well established in India.

2 .

The green revolution did not exactly incite to apply its principle in agriculture. Indeed, food self-sufficiency was the

Floriculture is defined as the cultivation, plantation and

only purpose so pesticides and GMO where used without

marketing of flowering and plants. The products are cut

restrictions. Now, India has to improve the quality of its culture

flowers, pot plants, cut foliage, seeds bulbs, tuber, and dried

to avoid bigger problems like the adaptation of parasites to

flowers or leaves. Floriculture represents 400,000 ha in terms of world area. Asia Pacific has 60% of the global area with

3


245,000 ha. As for India, there is under 64,000 ha area under

about a “rosy future” and planned a growth percentage of

flower production (3,400 in Maharasthra).

30%. Indeed, the perfect climatic conditions and the help of the government and others institutions will ensure India to

International trade in floriculture, to a large extent is organized

become an important actor in this market.

along the regional lines. Asia-Pacific countries are the main suppliers to Japan and Hong Kong. African and other

3 .

European countries are the principal suppliers to Europe's main markets, and the supplies to the USA are mainly catered

A cluster is defined as “a concentration of enterprises

by Colombia and Ecuador.

producing same or similar products or strategic services and is situated within a contiguous geographical area spanning

It represents a highly dynamic world industry. The global

over a few villages, a town or a city and its surrounding areas

exports has been growing at an annual average growth rate

in a district and face common opportunities and threats.”

of 10.3%, and at this growth rate world exports are expected

In India, floriculture clusters have been developed in MIDC

to reach US$ 25 billion by 2012. The main exporters are

Floriculture Park, Talegaon Dabhade, Pune district and in

Netherland, Colombia and Italy. Estimates of the annual

Varne Village at Satara District of Maharashtra with 145

consumption of commercially grown flowers worldwide vary

floriculture units for production of Dutch Roses, Gerbera,

by source and range from US$ 40 - 60 billion. On the demand

Carnation and Limonium under poly house covering 121 acres

side, around 80 percent of the consumption is accounted for

of area.

by six countries, including Germany, USA, UK, France, the

The floriculture cluster is born by the cooperation between

Netherlands and Switzerland.

several producers of flower in the region of Pune according to

India is positioned as the 23rd in the flower world market. The

characteristics like the way of production at the beginning of

perspective of growth is very positive - the government speak

1990‟s.

4


Their activity is growing cut flowers under controlled conditions

floriculture subsidies), Maharashtra State Agriculture Marketing

in poly-house thanks to technology like tissue cultured plants,

Board (MSAMB), Maharashtra Floriculture Development Board

water soluble fertilizers, part mechanization, cold chain,

(Sister organisation of the previous one), agriculture College

packaging and post-harvest technology.

(Hi Tech Training center), FAO Assisted Floriculture Project at Rajgurunagar, Western India Floriculture Association (lobby

Their vision: accelerate the development of commercial

role), National Chemical Laboratory, Maharashtra Industrial

horticulture (floriculture) by organizing the producer farmers

Development Corporation etc.

for a better utilization of resources, transfer of technology and gaining benefit of scaling up. Two types of producing: 

The oriented exported units (EOU) o 21 big units owned by corporate sector with o Size ranges from 2ha to 7.5ha (doc 4). o Exporting 60 to 70 % of the produce (USA, Germany, Netherlands, United Kingdom, Japan, Canada and UAE ).



The small units o 100 small units run by farmers o Ranging from 500 to 400 sq. m. o The domestic market

4 . Department of Horticulture,(subsidies, sponsored floriculture development) the national Horticulture Board (promotion of

5


.

the sector must reach. Thus, it‟s a very important political

P

1 .

document which orients all the agriculture economy (NHB, 2011). To reach this aim, the budget allocated has been fixed at 250 Rs. crores.

. Politics is very important for the economy in India and it‟s particularly true for the agriculture. Indeed, it created some organisms and working groups to develop this activity and make it thrive. The 12th five years planning commission explain they need to work together into the integrated National Horticulture Development programme. For example, one of them is the National Horticulture Board (NHB), set up by the government in 1984. Its objectives are “to improve integrated development of Horticulture industry and to help in coordinating, sustaining the production and processing of fruits and vegetables” (NHB, 2011). Concerning the 12th five years planning commission, India

.

expects a 5.5 growth rate in Flower production, regarding 5.16

Regarding

targeted for the last plan. Lower than fruits, vegetable and

subsidiaries,

they

come

from

both

Indian

government and Maharashtra state. First one accords the

nuts estimations but higher than plantation crops and spices

status of “extreme focus segment” to floriculture; that is to say

(cf. chart below). This detailed plan gives precise indications

programs are set up to help little production units to produce

6


and export. This “support is available for R&D, production

(AEZ). “With the primary objective of boosting agricultural

infrastructure and market development” (FAO, 2010). In

exports from India, in March 2001, Government of India

another side, “Maharashtra Government initiatives are very

announced a policy of setting up of Agri Export Zones across

unique to make agriculture, horticulture, Agri business, Food

the country” (APEDA agriXchange, 2013). One of the major

Processing industry highly competitive and successful in the

components of this comprehensive concept is “the

country” (NPCS, 2013). NPCS list them as following:

cluster approach of identifying the potential products and

geographical region in which these products are grown”.

Reimbursement of 50% of the net VAT paid, instead of

Concretely, Maharashtra state has eight AEZ and Pune has

25%; 

been chosen as AEZ for floriculture.

5% interest subsidy on term loans for fixed capital

Political aspects are decisive for floriculture in Pune. Mostly

investment for 5 years; 

positive, the frame is very strict. It‟s also a form of dependence

In the case of products attracting zero VAT, incentives

for it. For the moment, the cluster just needs to lean on it to

against the amount of VAT retained and not refunded

thrive.

on input purchases. 

Eligibility criteria (additional investment of 25% subject

.

:

to a minimum of INR 1 crore) for providing incentives in

the case of expansions under PSI 2007

Monetary policy has a great influence on trading and

The National Horticulture Mission (NHM) provides 50% of

exportations. Indeed, if rupee‟s values decrease regarding

the capital cost with a cap of Rs. 3 lakh per unit for

other currencies, foreign countries will take advantage of

basic infrastructure. date : 2011.

importing from India because products cost them less. And vice versa.

The

last

element

of

the

state

intervention

regarding

horticulture in India is the creation of Agricultural Export Zones

7


In general, currency rate is fluctuating with investors‟ capital

E

2 .

flow but in India, government is particularly involved in

.

currency exchange. Then, during 2000‟s – and especially during the world financial crises - the exchange rate has

The liberalization of the economy since 1991-1992 with major

decreased to allow more trade with other countries.

reforms especially about the deregulation of private sector,

Nevertheless, the rupee is now evolving and its exchange rate

offers new perspectives (Etienne and Ruet, 2010). The Asian

is at its highest point (forexticket, cf. chart below).

flower industry has the potential to become the leading flower industry in commercial floriculture worldwide thanks to a suitable climate and an adequate technology, it‟s now the second largest producer of flowers after China and before USA. Looking to the future, the Asian flower industry could rival, if not surpass, the size and scope of the European flower industry

which

presently

dominates

global

commercial

floriculture. The largest importer and exporter by value is the Netherlands, which is both a grower and a redistributor of crops imported Another determining factor for exportations is duty tax set up by foreign importing

countries. Regarding this

from other countries. India is only the 23th exporter but their

aspect,

facing a 30 % growth rate of the exportations (AIMS, 2013).

European Union is very protectionist and imposes high duty

The country has exported 30,926,023 tons of floriculture

taxes on flower importations. That is very disadvantageous for

products to the world for the worth of Rs.365.32 crores in 2011-

non-European producers, like India (Kapoor, 2013).

12 (10 millions US$) (APEDA, 2011). According to some authors,

8


exportation is sowing down because of many logistical

.

problems that they need to solve (Ravinath, 2007).

India is the second largest country in terms of number of

The major export destinations (2011-12 data) are USA,

workers. About 487 millions of people are working there. In

Germany, Netherlands, United Kingdom, Japan, Canada and

one hand, 93 % of the work force is from the unorganized

UAE (AIMS, 2013).

sector which isnâ€&#x;t incorporated, formal, it refers to unlicensed, self-employed or unregistered jobs. It is represented by a

.

ranging of jobs from pushcart retailers to weavers, handloom

In spite of very wide fluctuations in the prices of the products,

workers, leather workers, plantation labour, beedi workers etc.

the horticulture sector is recording a 5 % growth in 2011 and

This work force is used to casual labour (Government of India,

expecting a 6.5 % for the next five years (12th five-year plan for

2007).

Horticulture and plantation crops). The floriculture sector is

On the other hand, the minimum wage is 15 times lower than

expected to have an average annual growth rate of 5.5%

in the United States and two times lower than in India (The

(NHB, 2011).

World Bank, 2012).

In India, about 190 thousand ha area was under Cultivation in

The labour is cheap which help in keeping down the

floriculture in 2011-12. Production of flowers is estimated to be

production cost.

1.031 million loose flowers and 690.27 million cut flowers in 2011-12 (APEDA, 2011). Maharashtra, Karnataka, Andhra Pradesh and Haryana have emerged as major floriculture centres. Maharashtra stands 6th in respect of area under floriculture in the country with approximately 8500 ha. under cultivation (NHM, 2006). Pune

is

the

dominant flower

producing in Maharashtra. (Ravinath, 2007)

9


3 . .

,

S

from 45.3% of the population living below the poverty line in 1994 to 29, 8% in 2010 (the World Bank, 2012). Inequality is also a matter of education, the literacy rate is only 61% for the

India is known for rigid labour laws but because of the

entire population (and 41% for the women) but in the same

importance of unorganized, social protection remains weak,

time 3.5 millions of students graduates each year with great

with severe abuse often criticized: dangerous working

qualifications and mastering the English language (.ref). India

conditions, low wages, exploitation of child labour. India's

is the second largest pool of scientists and engineers in the

ministry of labour has identified significant issues with migrant,

world.

home or bondage labourers and child labour. These issues

.

may be encountered by any company who wants to benefits

The rural population of the state is 61.3 % (4.84 crore) of the

from the low labour cost. It is a duty to ensure that Humanâ€&#x;s

total population. This means, a significant part of the

rights are respected. The Corporate social responsibility is a

population is available to work on flowers cultivations.

way to do that and be aware of our social responsibility. Indians companies, maybe through the history culture and religion of the country, pay a close attention to CSR and

4 .

international standards (Chahoud and al. 2007).

.

.

T

The Gini coefficient (a measure of the degree of inequality in

The Indian Council of Agricultural Research is the

income distribution. 0 to 100, where 0 represents total equality,

premier agency which pioneered systematic research on

everyone has the same income and 100, a person has all the

agricultural crops in the country. Rapid expansion of

income, the others nothing) increased from 32.5 in 1994 to

infrastructure took place in 7th and 8th Plans. Today, the

36.2 in 2004, while at the same time poverty has decreased

horticultural research in the country is being carried out at 8

10


Dry flower technology

ICAR institutes (with 26 regional stations), 10 National Research Centres (on major crops) and a Project Directorate on

India is one of the major exporters of dried flowers to the tune

Vegetable crops. In the area specific, 215 centres locate at various

research

Institutes,

and

also

State

of 5% world trade in dry flowers. This industry shows a growth

Agricultural

rate of 15% annually. Research in dry flowers in India is limited

Universities. As a result, the country now has a sound research

and published information on dry flowers is almost nil.

infrastructure in horticulture to meet the growing needs and

Organized Research set up (Govt. & Private) should be

expectations of the fast developing horticulture industry. (K.L.

established. Proper funding for research in dry flower is a must

Chadha 1999)

since this industry shows great opportunity to rural areas and cottage industries. So that India will be the leader in this area

. Biotechnology

of development in near future.

Biotechnology has a broader societal dimension in India. It is

Future Areas of Research in Dry Flowers

not regarded only as a private profiting activity, but also as a tool to foster national development. In fact, India quickly identified the potential biotechnology had for the promotion of

national

development.

The classification: healthcare biotechnology, agricultural biotechnology, industrial biotechnology and environmental biotechnology. Agricultural

biotechnology:

hybrid

seeds,

Standardization of raw materials for trade

Standardization of production technology

Standardization of processing and packing

Identification of markets for new products

Regulation of marketing strategies in various localities

Application of modern drying techniques for quality

(P. Arul Murugan, G. Thiyagarajan, K. Ramesh 2007)

biopesticides,

biofertilizers and plant extraction. (Government of Catalonia, 2010)

11


Post-harvest technology management

including

storage,

and

transportation.

Post-harvest

management, including cold treatment, proper packaging

Flowers are highly perishable unlike other horticultural or

and

agricultural crops. Owing to poor keeping quality the post-

application

of

preservatives,

may

need

to

be

strengthened.

harvest losses in floriculture are significantly higher than any other sector. The post-harvest losses become important

Indian

especially when dealing with the export of fresh flowers to

packaging practices and learn from the success of other

distant and foreign market. (P. Naveen Kumar 2012)

countries. (Export-Import Bank of India 2006)

Systems for harvesting and marketing cut flowers vary

5 .

according to individual crops, growers, production areas, and marketing systems. All involve a series of steps - harvesting, grading,

bunching,

sleeving,

packing,

pre-cooling

floriculture

.

and

industry

needs

to

examine

current

E

The state of Maharashtra is having the perfect climate for

transportation - not necessarily in that order. Management

floriculture due to its climatic conditions and soil texture

systems should be selected so as to maximize post harvest life

(MSAMB). Nevertheless, the global warming could have an

of the flowers, a goal which usually requires prompt pre-

important negative impact on agriculture in this area. Indeed,

cooling and proper temperature management throughout

with a global temperature rise of 4.4oC by 2080 over the

the harvesting chain. (M.S. Reid)

cultivated areas, Indiaâ€&#x;s agricultural output is projected to fall

Preservation of flowers

by 30-40% which would be quite alarming unless proper

Indian exporters must ensure that their produce is free from

remedial measures are taken, according to the National

disease and that it is carefully treated once harvested.

Botanic Research Institute. Of the 100 talukas in the state, 45

Exporters should also plan and monitor effective quality

have been identified as being drought prone, according to

control measures right from production to pose harvest stage

the Central Water Commission statistics (CWC, 2005). Due to

12


regular drought frequency, low levels of irrigation coverage,

local product. Floriculture has a huge impact on air pollution

literacy, and infrastructure development and poor coping &

by transporting the flowers. This aspect can be a threat for

adaptive capacity, this region is highly vulnerable to impacts

floriculture market as Netherlands, the number 1 in the global

of climate change. These modifications of the climate will

market, is nearest from other European countries. If we want

have an impact of the seasonal pattern and could conduct

to develop the exportations, we have to take into account

to an extermination of certain plant species, key components

this point and find solutions to reduce it by a good logistic

of the ecosystem. (National Botanic Research Institute, 2010)

reducing the carbon prints or to find new markets.

The area under flowers in Maharashtra was 6600 hectares with an

annual

production

of

28000

metric

tons.

.

Besides,

In the backdrop of the food crisis that gripped India in the

infrastructures created for the floriculture sector includes 16

1960s and 1970s the Government of India initiated the „Green

tissue culture units, 800 poly/green houses, 43 pre-cooling units

Revolution‟ program with the ambitious objective to become

and 101 cold storage units (Government of India, 2007). This

self-sufficient in production of food grains and then to reduce

figures show that even if global warming will have a huge

the alimentation issue. As a result, traditional farming methods

impact of agriculture in the state, the sector of the floriculture

gave way to farming with high-yield seeds, fertilizers, and

will be less impacted as an important part of the cultivation is

pesticides. Fertilizer application rose more than five-fold

under protected areas.

between 1970 and 2002 to 17360 thousand tones.

.

A few decades down the road, it is evident that the benefits

India is trading with European markets. Indeed, we have to be

of the Green Revolution are associated with unanticipated

aware of the consumer behaviors in this area and their

harmful

expectations. European people are more consciousness

“environmental disaster” had an impact on agriculture by

about consuming organic products, and more and more

contaminating

13

effects

of water.

chemicals. Agriculture,

(Pingali, through

2012).

This

irrigation,


accounted for 83 percent of the total water use in the country

needs

to

go

during 1990 (Vyas 2003). During the Green Revolution period

revolution to spark a social revolution, making rural India

water consumption in agriculture rose sharply as the net

as attractive as urban India.” Bishwambhar Mishra, Chief

irrigated area increased from 31.1 to 54.68 million hectares

Executive

between 1970-71 and 2000-01, while the area irrigated more

Equipment Sector

-

beyond

Tractor

&

yesterday’s

Farm

technological

Mechanization,

Farm

than once per year increased from 7.09 million to 20.46 million

.

hectares during the same period. As for the floriculture sector, the use of chemicals had become a habit and a rising

The government of India plays a key role in the promotion of a

production will get worse for both the environment and

“green agriculture”. As we said, with the “second green

people who work in cultivated areas.

revolution”, it wants to ensure an alimentary safety by a respectful agriculture. It already had tried to promote an

In 2010, Indian Prime Minister Manmohan Singh called

organic agriculture. By increasing investments, Governement

Saturday for a second "green revolution" to feed the country's

of India has earmarked about Rs. 100 crores for the promotion

burgeoning population that is forecast to overtake China in

of organic agriculture in the country. The main components of

numbers by 2025. This program focuses on food security taking

this initiative include farming of standards, negotiating with

into account the environment by developing a sustainable

different countries and putting in place a system of

agriculture.

certification for organic products, as part of the 10th five year

“By 2025, India is expected to be the most populous

plan. Central Government is also promoting the production

country in the world.

Securing food, nutrition, and

and use of bio-fertilizer to make it popular. Government has

livelihood security for our rising population is urgent. […]

initiated a project “National Project on Development and Use

The Second Green Revolution needs to focus on

of Bio fertilizers”.

environmental sustainability and broad-based impact. It

14


To promote the organic agriculture in India government has

.

also taken some initiatives. APEDA (Planning Commission,

Bloomberg reported that India‟s clean tech investments,

2001) is the nodal agency to promote the Indian organic

“reached $10.3bn in 2011, some 52 percent higher than the

agriculture and its exports opportunities. It has also developed Criteria

for

Accreditation

of

certification

$6.8bn invested in 2010. This was the highest growth figure of

agencies,

any significant economy in the world. There is plenty of room

Accreditation Procedure and Inspection and Certification

for further expansion – in 2011, India accounted for 4 percent

Procedures. In developing these standards and procedures

global investment in clean energy” This is pretty incredible

due attention is paid to the guidelines as enumerated by

considering

international organizations such as International Federation for

that

India‟s

energy

sources

have

always

traditionally been coal, hydropower and nuclear. These

Organic Agricultural Movement (IFOAM), EU Regulations and

impressive figures show that India has the ambition to make

FAO Codex Standards. As part of this program, a National

green innovation as a key for its development.

Logo for organic products on behalf of Govt. of India has also been developed.

Large growth was driven by a seven-fold increase in funding

As for floriculture, there is no specific certification for organic

for grid-connected solar projects: from $0.6bn in 2010 to

production in India. Nevertheless, it is interesting to see that in

$4.2bn in 2011. Solar almost reached the same level of

other countries as European countries, there are codes of

investments as wind, which totaled $4.6bn.”. Moreover, India

conducts in the flower trade: the Dutch milieu programma

has a national record of 2.827 GW in wind power. This brings

sierteelt (MPS), Flower Labelling Programme (FLP), Fair Flower

India into third place (behind China and the US) for new

and Fair Plants label (FFP), etc.

installations globally in 2011. The impact for the sector of floriculture will automatically by positive. Indeed, these investments in clean technologies will

15


develop new ways of cultivating and producing flowers in a

Monopolies and Restrictive Trade Practices Act of 1969

respective way for the environment: development of bio-

governs restrictive and fair trade practices. The New Industrial

technology/Micro-propagation, use of hybrid seeds and

Policy was launched in order to liberalize the foreign

planting

materials,

investment in the country (Europe - India SME Business Council,

climatic

conditions,

hi-tech green

cultivation house,

under

controlled

poly-house,

hi-tech

2013).

adoption of controlled atmosphere storages, irrigation by drip,

.

sprinklers, community tanks, water harvesting tanks, plastic

Although agricultural legislations in the country was the

mulching, etc.

6 . .

legacy of British, real efforts were commenced only after 1947 to alter the economic condition of farmers and status of

L

farming through legislative measures. Since Five-Year Plans became an integral part of the development process, agricultural legislations also became portion of a purposeful

India is a common law country with a written constitution and

national effort for changing the socio-economic condition of

which guarantees individual and property rights. Major bodies

the society.

of law affecting foreign investment in India are the Foreign Exchange Management Act of 1999 (FEMA), the Companies

ICAR report covers agricultural legislation under following

Act of 1956, the Industries Act of 1951, the Monopolies and

broad categories-land legislations and reforms; legislation and

Restrictive Trade Practices Act of 1969 and the New Industrial

reforms of input management [legislations, related to fertilizer,

Policy (NIP) of 1991. Foreign collaboration and equity

seed, pests and pesticides, genetically modified organisms

participation is governed by FEMA of 1999. The Industries Act

(GMOs), agricultural biotechnology and other inputs]; labour

governs industrial regulations. The Companies Act of 1956

laws in Agriculture; legislation in agricultural marketing;

regulates corporations and their management in India. The

legislations in livestock sector; legislations of agriculture credit

16


and finance, legislation in co-operative sector and the panchayat. (ICAR Aglicultural Legislation 2013)

. In India, exports and imports are regulated by the Foreign Trade (Development and Regulation) Act, 1992. Most items can be freely exported from India. The salient features of the Act are as follows: 

It has empowered the Central Government to make provisions for development and regulation of foreign trade by facilitating imports into, and augmenting exports from India and for all matters connected therewith or incidental thereto



It authorizes the Central Government to formulate and announce an Export and Import (EXIM) Policy and also amend the same from time to time, by notification in the Official Gazette.



Under the Act, every importer and exporter must obtain a 'Importer Exporter Code Number' (IEC) from Director General of Foreign Trade or from the officer so authorised. (Business Portal of India 2013)

17


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