Growth, Instability and Structural Dynamics in Chilli Export from India

Abstract

India's export market is extensive and vibrant, significantly enhancing its global economic influence. As one of the world's major producers and exporters of red chilli, India has a significant influence on the global spice trade. Thus, the study analysed India's chilli export trend from 2010-11 to 2023-24, focusing on major markets like China, the USA, the UAE, Thailand and Sri Lanka. The research focused on growth, instability, the association between growth and instability and factors affecting the export of chilli from India and revealed India's comparative advantage in chilli export. The results indicated that the export quantity grew non-significantly, while value growth was significantly positive. All markets exhibited instability, with China being the most volatile and Sri Lanka the most stable. China, the USA, the UAE and Thailand were found to be the preferred destinations for the export of Indian chilli. Indian production and exchange rates influenced exports. India had a comparative advantage over China, Sri Lanka, Thailand and the UAE. The most loyal markets for Indian chilli were China and Thailand, whereas Sri Lanka and the UAE were unstable markets. The USA and other countries exhibited moderate loyalty. Chilli exports from China, the United States and Thailand are expected to increase. However, Sri Lanka, the UAE and other countries indicate a decreasing tendency.  The Spices Board of India guarantees that Indian chilli satisfies international quality standards through certification schemes like Agmark, which helps to maintain Indian chilli's reputation in worldwide markets. Predictions of future chilli exports showed that China, the USA and Thailand had an increasing trend. However, Sri Lanka, the UAE and other countries had a decreasing trend.