An Analysis of Factors Influencing Indonesia’s Leading Agricultural Commodities Export to India

Ibnu Muchtar Rosyidi, Heru Irianto, Sutrisno Hadi Purnomo


Indonesia's trade balance to India had been decreasing since 2013. That has been affected by the downward trend in agricultural export value of Indonesia. This problem has raised Government’s attention to increase the export performance. This research aimed to analyze the determinants of Indonesia’s leading agricultural commodities export to India. Panel data regression model was explored to analyze secondary data of the range year 2001 to 2017. The factors examined in this study were India’s real Gross Domestic Product (GDP) per capita, Rupiah exchange rate, export price of Indonesia agricultural commodities and India’s import tariff. Model testing used the Chow, Hausman and Lagrange tests to compare and select the best model. The determinant of the variables testing used statistical and classical assumption tests. The results showed that India’s real GDP per capita has positive influence to the export value which means an increase in the purchasing power of trading partners would increase the value of exports. The Rupiah exchange rate has negative influence to the export value which means that the depreciation of rupiah to dollar causes a decrease in the export value. The export price of Indonesia’s agricultural commodities have positive influence on the export value, however the tariff has no effect. The policy that can be suggested to the government is to provide support and encourage domestic producers to increase exports to India.


agricultural commodities; agricultural trade; exchange rate of rupiah; GDP

Full Text:



Akhmadi, H. (2017). Assessment the impact of ASEAN Free Trade Area (AFTA) on exports of Indonesian agricultural commodity. AGRARIS: Journal of Agribusiness and Rural Development Research, 3(1), 9–14. Crossref

Albornoz, F., Brambilla, I., & Ornelas, E. (2019). The impact of tariff hikes on firm exports. In Mimeo. Retrieved from Link

Amity, M., Redding, S. J., & Weinstein, D. E. (2019). The impact of the 2018 tariffs on prices and welfare mary. Journal of Economic Perspectives, 33(4), 187–210. Crossref

Boansi, D. (2014). Determinants of agricultural export trade: Case of fresh pineapple exports from Ghana. British Journal of Economics, Management & Trade, 4(11), 1736–1754. Crossref

Breusch, T. S., & Pagan, A. R. (1979). A simple test for heteroscedasticity and random coefficient variation. Econometrica, 47(5), 1287–1294. Crossref

Cheng, B., Liu, S., Xiong, L., Wang, F., Qin, G., Yue, D., Zhang, H., & Yu, C. (2019). Identifying the influencing factors on the quality of China’s forestry exports. Forestry Economics Review, 1(1), 2–16. Crossref

Djoni, D. D., Atmaja, U., & Fauzi, A. (2013). Determinants of Indonesia’s crude coconut oil export demand. Journal of Economics and Sustainable Development, 4(14), 2222–1700. Retrieved from Link

Elsheikh, O. E., Elbushra, A. A., & Salih, A. A. A. (2015). Economic impacts of changes in wheat’s import tariff on the Sudanese economy. Journal of the Saudi Society of Agricultural Sciences, 14(1), 68–75. Crossref

Food and Agriculture Organization. (2018). The state of agricultural commodity markets 2018. Retrieved from Link

Girsang, L., Sukiyono, K., & Asriani, P. S. (2018). Error correction model for Pakistan export demand for Indonesia’s Crude Palm Oil (CPO). Journal of Agricultural Science, 1, 68–77. Retrieved from Link

Gul, N., & Yasin, H. M. (2011). The trade potential of Pakistan: An application of the gravity model. The Lahore Journal of Economics, 16(1), 23–62. Crossref

Gururaj, B., Satishkumar, M., & Kumar, M. K. A. (2016). Analysis of factors affecting the performance of exports in India. International Journal of Agriculture, Environment and Biotechnology, 9(4), 613–616. Crossref

Hall, S., Hondroyiannis, G., Swamy, P. A. V. B., Tavlas, G., & Ulan, M. (2010). Exchange-rate volatility and export performance: Do emerging market economies resemble industrial countries or other developing countries? Economic Modelling, 27(6), 1514–1521. Crossref

Hong, T. T. K. (2016). Effects of exchange rate and world prices on export price of Vietnamese coffee. International Journal of Economics and Financial Issues, 6(4), 1756–1759. Retrieved from Link

International Trade Centre (ITC). (2019). Trade Map. Retrieved from Link

Javed, T., Younas, W., & Imran, M. (2014). Impact of capital structure on firm performance: Evidence from Pakistani Firms. International Journal of Academic Research in Economics and Management Sciences, 3(5), 125–144. Crossref

Kahfi, A. S. (2016). Determinants of Indonesia’s exports of manufactured : A Panel data analysis. Buletin Ilmiah Litbang Perdagangan, 10(2), 187–202. Crossref

Karagöz, K. (2016). Determining factors of Turkey’s export performance: An empirical analysis. Procedia Economics and Finance, 38, 446–457. Crossref

Kementrian Perdagangan. (2018). Neraca Perdangangan. Retrieved from Link

Krugman, P. R., & Obstfeld, M. (2005). International economics: Theory and policy (7th edition). New York: Pearson Education.

Kustiari, R., & Hermanto, N. (2018). Impacts of Indonesia-India free trade agreements on agricultural sector of Indonesia: A CGE Analysis. Jurnal Agro Ekonomi, 35(1), 33–48. Crossref

Lubis, A. (2016). Analisis faktor yang mempengaruhi kinerja ekspor Indonesia. Jurnal Akuntansi & Auditing, 13(1), 80–96. Crossref

Mazurek, J., García, C. F., & Rico, C. P. (2019). The law of demand and the loss of confidence effect: An experimental study. Heliyon, 5(11), E02685. Crossref

Mohamad, J. (2012). The impact of tariff reductions on real imports in Malaysia from 1980-2010. Cambridge Business & Economics Conference. Retrieved from Link

Narayan, S., & Bhattacharya, P. (2019). Relative export competitiveness of agricultural commodities and its determinants: Some evidence from India. World Development, 117, 29–47. Crossref

Orden, D. (2002). Exchange rate effects on agricultural trade. Journal of Agricultural and Applied Economics, 34(2), 303–312. Crossref

Purnomowati, H. D., Darwanto, D. H., Widodo, S., & Hartono, S. (2015). Analisis permintaan karet alam Indonesia di pasar internasional. AGRARIS: Journal of Agribusiness and Rural Development Research, 1(2), 136–148. Crossref

Ramayani, C. (2015). Pengaruh investasi pemerintah, investasi swasta, inflasi, eksport, tenaga kerja dan produktivitas tenaga kerja terhadap pertumbuhan ekonomi di Indonesia. Economica, 1(2), 203–207. Crossref

Reynalto, A. E. (2019). Factors affecting the performance of Indonesia’s crude palm oil export. Agroland : The Agricultural Sciences Journal, 6(2), 89–99. Retrieved from Link

Riyani, R., Darsono, D., & Ferichani, M. (2018). Analisis permintaan ekspor komoditas pertanian Indonesia oleh pasar Tiongkok. AGRARIS: Journal of Agribusiness and Rural Development Research, 4(2), 120–128. Crossref

Salvatore, D. (2014). International economics : Trade and finance (11th ed.). Hoboken, New Jersey, US: John Wiley and Sons, inc.

Sertoglu, K., & Dogan, N. (2016). Agricultural trade and its determinants: Evidence from bounds testing approach for Turkey. International Journal of Economics and Financial Issues, 6(2), 450–455. Retrieved from Link

Sheldon, I., Mishra, S. K., Pick, D., & Thompson, S. R. (2013). Exchange rate uncertainty and US bilateral fresh fruit and fresh vegetable trade: An application of the gravity model. Applied Economics, 45(15), 2067–2082. Crossref

Sinha, N., & Singariya, M. R. (2015). Relationships among per capita GDP, agriculture and manufacturing sectors in India. Journal of Finance and Economics, 3(2), 36–43. Crossref

Uzunoz, M., & Akcay, Y. (2009). Factors affecting the import demand of wheat in turkey. Bulgarian Journal of Agricultural Science, 15(1), 60–66. Retrieved from Link

Van den Berg, H. (2016). International economics: A heterodox approach (3th Edition). New York: Taylor and Francis. Crossref

Wahyudi., T., Anggita., S., & Riyandi, S. (2015). The gravity model of Indonesian bilateral trade. International Journal of Social and Local Economic Governance, 1(2), 153–156. Crossref

World Bank. (2018). World bank economic database. Retrieved from Link

World Trade Organization (WTO). (2012). A practical guide to trade policy analysis. A Practical Guide to Trade Policy Analysis. Crossref

Yunusa, L. A. (2020). Exchange rate volatility and Nigeria crude oil export market. Scientific African, 9, e00538. Crossref


  • There are currently no refbacks.