INDIA: VIRTUAL WATER TRADE AND SUSTAINABLE WATER RESOURCES MANAGEMENT

Abstract

Water has historically been considered a cheap and plentiful resource by most cultures in the world. But the situation is changing. World wide the demand for fresh water is increasing day by day with increasing populations and changing consumption patterns that demand the use of more water. The water used in the production process of an agricultural or industrial product is called the 'virtual water' contained in that product. So when a country or region exports water intensive products it is actually exporting its water. This transfer of water along with trade in goods or services is called 'virtual water trade'. Some water scarce countries have used the concept of virtual water to manage their water situation, by stopping the export of water intensive products and importing goods that need a lot of water to produce. India has only 2.4% of the world's land and 4% of the world's water resources but supports 16.4% of the world population. Since independence in 1947, India has gained self-sufficiency in food. This was the result of the near doubling of the irrigated area accompanied by the introduction and rapid spread of high yielding varieties of major crops and increased application of chemical fertilisers. India's trade to GDP ratio has also increased substantially since the 1990s. In the present atmosphere of globalisation, India's share in the world trade, which stood at 1.5% in 2006, is expected to go up to 2% in 2009. India is also the only country in the region, which is a net exporter of virtual water, being one of the top ten virtual water exporters in the world. There is also significant internal trade and hence virtual water trade in India. Some regions with substantial virtual water outflows are experiencing water shortages and rapidly falling ground water tables. With rapid industrialisation and urbanisation, non-agricultural requirements of water have also been on the rise and are expected to increase more than three fold between 1995 and 2025. With wide disparities in rainfall between different regions and increasing demand for water, the Government of India is considering a proposal to interlink the major rivers in the country at an estimated budget of US$ 112 billion at 2002 prices for the entire project which is expected to go up to US$ 200 billion. With an increasing population and resulting increase in demand for food and water, and the looming threat of climate change whose effect on the water availability in different regions cannot be accurately predicted (see section 4.10.3), caution has to be exercised while forging ahead with economic development. The impact on sustainability of water resources has to be considered in undertaking export-oriented activities. Water resources planning within the country should also take into account along with other factors, the virtual water trade within the country, for managing the water resources in a sustainable manner. Virtual water trade should be used to relieve water shortages where possible. Research on virtual water and virtual water trade will also aid the formulation of policies that will help reduce the water stress felt by many regions, by reducing the virtual water flows from those regions.