India has the potential to make it big in the lucrative business of thoroughbred horse breeding. A few policy tweaks will help

The term “dark horse” in popular conversation refers to an unconsidered outsider. In the lucrative world of thoroughbred horse racing and breeding — a colossal business worldwide — countries like Ireland, Great Britain, the US, France, Canada, Australia, New Zealand and Germany have hitherto dominated. A recent gate-crasher to this party is Japan.

Few outside the country consider India’s prospects in this field but the time is ripe for India, truly a dark horse in this arena, to shine on the world stage. After all, the country has a long history of horsemanship stretching back almost 4,000 years, and there is mention of the virtues of “Ashwa” in several learned treatises such as the Rigveda, the Atharvaveda, and so on.

History records that the sport of horse racing was kick-started in Great Britain in the era of King Charles II in the 17th century and was introduced to India over 200 years ago by the British, with the first racecourse having been established at Madras (now Chennai) in 1777. Obviously, one cannot have horse racing without the noble horse and so a whole new industry — horse breeding — sprang up in the 20th century centred in the Punjab as also the Bombay Province of undivided India.

A hundred years later, the country has a well-established breeding industry — spread over nine States — rivalling Italy and Germany in size. Foal production witnessed spectacular growth of 76 per cent in the decade 1988-1997, as well as impressive progress of 38 per cent between 2002-2011. Unfortunately, a combination of circumstances has seen production drop to a 30-year low in 2019, as the imposition of GST at 28 per cent on wagering is strangling the horse racing sector of the sport.

Mind-boggling values

Meanwhile, the rest of the world has seen unprecedented globalisation of horse racing and breeding. It’s not uncommon for a Japanese horse with an American grandfather to win a prestigious race in Hong Kong with a Brazilian jockey on board — as happened twice last week! Trade volumes and values are mind boggling. A few examples will suffice: early this month a pregnant mare sold in England for 2.1 million guineas (?20.67 crore), while February 2020 will see the cream of the world’s thoroughbreds competing in a race worth a stunning $20 million (?142.50 crore) in Riyadh, Saudi Arabia. Stallions like Frankel and Justify, though not for sale, would be worth over $50 million each (?356 crore) if they were!

Test shipments of Indian thoroughbreds have shown that they can be competitive at a modest to decent level on the world stage, particularly in countries which have perforce to import all their race horses. India is placed in a favourable geographic location as being the only sizeable recognised Northern Hemisphere thoroughbred producer in a wide arc stretching from Turkey in the West to Japan in the East.

Racing locations such as Kuwait, Bahrain, Qatar, UAE and Oman to the West and Singapore, Malaysia, Hong Kong and Macau to the East collectively import thousands of thoroughbreds each year — and no one is better situated to cater to these markets than India. Climatic conditions are similar while shipping distances are shorter than from many competitors.

What needs to be done to enable India to enjoy a slice of the export pie? Just two simple steps: i) the abolition of archaic import licensing, and its replacement with a decentralised system of import permits, based on health grounds alone, and ii) the removal of the crushing burden of 48.96 per cent import duty and GST on pureline breeding stock, as is the case in virtually every horse breeding country in the world.

The cost to the government for the former is nil (rather, there would be a saving by not requiring multiple ministries and committees to spend their valuable time assessing applications), while for the latter the amount foregone is insignificant and would be easily recompensed by the huge upturn in economic activity in this sector.

Indian horse breeders could then vastly up their game and import superior stock, thus facilitating the export of ready-to-race thoroughbreds with a huge cost advantage compared to rival exporters. Truly ‘Make-In-India’ at its best! Moreover, shrewd international investors could bring in valuable FDI, recognising the cost savings the country offers in rearing and training thoroughbreds in what is a highly labour-intensive business. The scope for employment generation, particularly in rural areas, is enormous. It’s a win-win situation all round.

“There is a tide in the affairs of men. Which, taken at the flood, leads on to fortune”. Let’s not spurn this opportunity!