This measure is expected to give Indian cut flower exporters a level playing field vis--vis their competitors in East Africa and East Asia.
Europe and Japan are two major destinations for Indian cut flower exports, accounting for 76% of the total FoB value and 88% of the export volume. East African countries like Kenya, Tanzania are logistically well placed to cater to European markets, particularly Holland where auction takes place. Similarly South Korea, Thailand, China, and Vietnam are well placed to cater to the Japanese market.
The Agriculture and Processed Food Export Development Authority (APEDA), which also promotes floriculture exports has suggested doubling of the air freight subsidy on cut flower exports to 50% in the 11 th five-year plan period, which commenced from April 1, this year.
APEDAs suggestion is now engaging the attention of the Union commerce ministry. Floriculture units, particularly those located around international airports in Mumbai, Pune, and Bangalore, would be largely benefited if the hike in air freight subsidy materialises. However there are second-generation floriculture projects, which are coming up in areas away from the international airports.