Assessment of India’s Agricultural Trade Dynamics and Trade Volatility Through Markov Chain Analysis

This study examined India’s agricultural trade dynamics from 2017–2018 to 2024–2025. It integrated descriptive trade analysis, the Herfindahl–Hirschman Index (HHI), the Cuddy–Della Valle Index (CDVI) and first-order Markov chain (MC) transition probability matrices across five commodity groups categorized by the national import–export record for yearly analysis of trade portal. Agricultural exports grew steadily over the study period (6.52%), whereas imports grew at a faster rate (9.60%), narrowing the trade surplus. All commodity groups exhibited diversified export destination structures (HHI below 1,500). Spices recorded the lowest CDVI (4.02) and meat and dairy the highest (10.65) across all groups. MC analysis identified Iran for rice, Malaysia and Vietnam for meat and dairy, China for spices and Nepal and the USA for cereal preparations as the most stable destination markets. In contrast, markets such as Iraq and Benin for rice, Egypt for meat and dairy and the UAE for spices exhibited high volatility, while fruits and vegetables showed weak market persistence overall. On the import side, structural concentration in edible oils highlighted a persistent gap in domestic oilseed production. Strengthening bilateral agreements, cold-chain infrastructure, phytosanitary compliance and import source diversification are recommended to address structural vulnerabilities.