International Flow of Virtual Water
India is home to nearly 18% of the world’s population but only holds 4% of the global water resources, making it one of the most water-stressed countries in the world. A country is categorised as ‘water-stressed’ when its annual per-person water availability is less than 1,700 cubic metres. Availability below 1,000 cubic metres qualifies a country as water-scarce.
The issues of lack of availability and access to quality water are closely related to how the world economy is set up. One of the most significant developments of the last two centuries has been the integration of national economies into a global economic system. This interlinking has drastically increased international trade. Currently, exports make up one-fourth of all worldwide production. A closer look at the trade pattern reveals that the international exchange of goods further contributes to water resource imbalance among nations.
An integral but invisiblised part of this exchange is the embedded water trade. Virtual water or embedded water is the amount of water used to produce a good or service. When goods are traded between countries, the water embedded in those goods is also transferred along with the goods in a virtual sense. The movement of such embedded water across countries and regions is referred to as ‘virtual water trade’. Virtual trade allows countries to import water-intensive goods for their citizens and, therefore, be less dependent on water resources within their borders.
International trade should ideally enable countries with limited access to water to import commodities that require a lot of water for their inhabitants, balancing the resources between water-poor and water-rich nations. However, this is not the case. For instance, per a 2019 WaterAid report, countries such as Pakistan, India, and South Africa, which have unsustainable levels of irrigated water use, account for about half of the UK’s total virtual water imports.
One of the largest users of water is the agricultural industry. Industrial and household use make up 20% and 10%, respectively, of all freshwater withdrawn for human use. On the other hand, agriculture typically consumes around 70% of this total freshwater withdrawn. There are some food grains and goods which, by nature, require a large amount of water for their production.
In India’s context, the trade pattern of crops reveals how international trade puts pressure on its scarce water resources. Some of the most water-intensive crops are cotton, rice, sugarcane, soya, wheat, and potatoes. Of these, India is one of the world’s largest exporters of cotton, rice, and sugarcane. The nation’s water resources are under considerable stress due to the production of these crops. Rice grown in India, for instance, uses excessive water and is known as a ‘water-guzzler’ crop. A kilogram of paddy, as grown in India, requires 15,000 litres of water and its farmers depend mainly on groundwater, which is now depleting rapidly. Interestingly, only 39 of the 133 countries India exports rice to, on a net positive basis, have relatively lower per capita renewable water resources.
Based on trade data for some popular crops and livestock, a 2019 study found that between 2006 and 2016, India exported 26,000 million litres of virtual water annually. The export of such a large quantity of virtual water occurs even though India is under water stress, as indicated by its per capita water availability.
The Central Water Commission estimated in a 2019 study that India’s per capita water availability would be approximately 1,486 cubic metres in 2021, categorising the nation as ‘water stressed’. Furthermore, India’s overall water demand will exceed its supply by twofold in 2030. Currently, 54% of the country, roughly 60 crore people, already face high to extremely high water stress. With 70% of India’s drinking being contaminated, even the scarcely available water is of poor quality.
Way Forward: Need to Rethink India’s Exports
The ongoing water scarcity problem is anticipated to worsen due to the expanding population and climate change. With India currently exporting several water-intensive food grains, it needs to switch to more climate-resilient crops to prevent a crisis in the future.
The agriculture industry is an excellent avenue for water conservation since it wastes a significant quantity of water using inefficient irrigation techniques and cultivating crops not fit for the local environment. For instance, Punjab, popularly referred to as the ‘granary of India,’ is one of the states that produce the most rice nationwide. However, Punjab is unsuitable for rice growing from an agro-climatic standpoint. As a result, the groundwater in Punjab is depleting at an accelerating rate.
Therefore, through incentives and awareness, the government should promote the production of crops suited for the areas they are grown. For example, according to a National Bank for Agriculture and Rural Development study, moving a significant portion of rice production to India’s central and eastern states like Chhattisgarh and Jharkhand would allow more sustainable rice production.
Apart from adopting more water-efficient methods for crop production, the government should promote the production and export of climate-resilient crops. Consequently, this will allow India to gain an advantage in the trade of crops with a lower environmental footprint. Nutri-cereals, for instance, have a lower overall water requirement and are a powerhouse of nutrients and, therefore, can help mitigate climate change and ensure the nutritional security of the citizens.
Water scarcity poses a severe challenge to a country’s social and economic development. A World Bank Report found that a lack of water will eventually lead to a 6% decline in the GDP due to water-related losses in agriculture, health, and income. Water insecurity also induces migration and civil unrest. However, a nation’s water stress does not impact all the citizens uniformly. The poor and marginalised communities are the worst affected.
In light of most nations already dealing with the effects of climate change, virtual water trade is a topic of global relevance. It beckons a revaluation of the existing trade patterns to ensure that virtual water trade is fair and sustainable, i.e., it helps solve the problem of resource imbalance instead of further aggravating it. Consequently, the trade regime must ensure that the global exchange of goods is not being used to outsource resource depletion but rather to ensure that water resources are being protected and distributed fairly across countries.
