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Virtual water trade: implications for India

Student name: Ms Prakriti Prajapati
Guide: Dr Ritu Mathur
Year of completion: 2015
Host Organisation: TERI University

Abstract: Food has accounted for 92% of the world‘s total water withdrawals in the recent past. During the period 1996-2005, India was the largest user of ground and surface water for production. The process of irrigation of wheat took the largest share, followed by rice and sugarcane. (Heokstra 2012) On an average, a kilogram of beef uses twenty times more water than the same quantity of cereals and starchy roots. (Mekonnen and Hoekstra 2010) India is expected to become water stressed by 2020 and water scarce by 2025. (Hegde 2012) Due to ample rainfall in the Indian subcontinent, India‘s water resources have been sufficient. It is the swelling density and undisciplined lifestyle along with inefficient water management which contribute to the present demand and supply imbalance. Assessment of water footprint and virtual water content of country‘s agricultural production was done in the year 2007. The study excluded livestock sector (Kampman 2007). The share of which in India‘s GDP has increased exponentially over the last five years equaling 4 percent in 2013 (DADF 2014). Current scenario of India‘s agricultural and livestock production and exports therefore, needs careful analysis. With increased export of water-intensive agricultural products and a commensurate rise in domestic demand for water due to urbanization, alternative uses and population increase; understanding the implications of trade in embodied water (virtual) is imperative. This Master‘s dissertation seeks to assess and evaluate the quantum and direction of virtual water of the country along with identifying the most water thirsty products which India exports, using an extended Input Output Matrix i.e. Social Accounting Matrix. Water Footprint Accounting Method (pioneered by Hoekstra) is also used to supplement and granulate the findings. The study identifies beef, rice, wheat and maize as extremely water guzzling products responsible for most of the virtual water trade between India and its trading partners. Current state of affairs with consistently expanding exports without proportionate increase in water productivity is sure to invite dire consequences on India‘s long run ecological sustainability. Keywords: Water Stress ∙ Water Scarcity ∙ Water Footprint ∙ Virtual Water ∙ Input Output Matrix ∙ Agricultural Exports ∙ India