Mapping the Trade Direction of Indian Rice with Markov Chain Analysis

Abstract

Agriculture is a cornerstone of India’s economy, with rice being a critical crop that ranks second globally, feeding over half of the world’s population and serving as a staple in Southeast Asia. This study explores the direction of India’s rice trade using Markov Chain Analysis, following an examination of the compound annual growth rate (CAGR) in rice exports to various global regions. Results reveal a 2.26 per cent CAGR in rice production, while export values surged by 16.8 per cent annually. Specifically, the CAGR for rice exports to Iraq and Iran reached 58.6 per cent and 46.47 per cent, respectively. In quantity, India’s rice exports grew by 10.82 per cent, with Iraq and Iran at 44 per cent and 34 per cent. The Transitional Probability Matrix for 2001-2022 indicates strong regional retention, with Africa maintaining 78 per cent of trade value and Asia 93.7 per cent, and similar trends in quantity, where Asia retained 92.6 per cent and Africa 89.1 per cent. These findings highlight India’s potential to diversify rice exports and strengthen its global competitive edge, urging a focus on enhancing processing, transportation, and quality standards for wider market appeal.