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To boost rice exports and support farmers income, govt lifts export duties

Indian government lifts Minimum Export Price for non-basmati white rice and removes export duties on parboiled and husked rice, aiming to enhance exports, support farmers, and ensure domestic price stability in the rice market.

rice

The Indian government has recently taken several significant steps to boost rice exports and support farmers by removing export restrictions and reducing duties on various rice varieties. On Wednesday, just a day after lifting export duties on rice varieties such as paddy, husked (brown) rice, and parboiled rice from 10% to nil, the government announced the removal of the Minimum Export Price (MEP) for non-basmati white rice exports. This decision is expected to boost the country’s rice export market and further stabilize the rice supply chain.

In an official order, the Directorate General of Foreign Trade (DGFT) stated, “The requirement of Minimum Export Price (MEP) for the export of Non-Basmati White Rice under HS code 10063090 has been lifted with immediate effect.” The MEP was previously set at $490 per tonne, which equates to approximately ₹41,193.25 per tonne. The removal of the MEP is aimed at enhancing exports by making Indian non-basmati white rice more competitive in the global market. This move was made with the approval of the competent authorities and follows the government’s earlier decision in September to withdraw a blanket ban on non-basmati white rice exports.

In a separate notification, the Ministry of Finance confirmed the reduction of export duties on parboiled rice, husked (brown) rice, and rice in the husk (paddy or rough). These duties have been brought down from 10% to nil, effective immediately. The government initially imposed a ban on non-basmati rice exports on July 20, 2023, but recent measures indicate a shift towards promoting the export of this staple commodity, especially given the ample stock available in government warehouses and stable retail prices.

These latest decisions reflect the government's strategy to boost rice exports and generate more foreign exchange revenue. Lifting the MEP and reducing export duties will make it easier for exporters to send non-basmati white rice, parboiled rice, and other rice varieties to international markets. India has a strong demand for these rice varieties, especially in regions with a significant Indian diaspora, including countries like the UAE, Maldives, Mauritius, and various African nations.

During the first five months of this fiscal year (April to August), India exported non-basmati white rice worth $201 million. In the previous fiscal year (2023-24), the country exported non-basmati white rice worth $852.52 million. The government has allowed shipments to friendly nations even during the export ban, showcasing its commitment to maintaining good diplomatic relations while safeguarding domestic food security.

This decision is expected to benefit Indian rice farmers, as higher exports will likely lead to better prices for their produce. The government’s earlier move to remove the MEP on basmati rice was similarly aimed at boosting exports and increasing farmers’ incomes. Additionally, the government has ensured that the rice stock in government godowns remains ample, ensuring that domestic retail prices stay under control. With the removal of export restrictions, the government is striking a balance between promoting exports and maintaining domestic stability in rice availability.

The ongoing war between Russia and Ukraine has had a disruptive impact on global food supply chains, including rice. These geopolitical tensions, coupled with India’s role as a major exporter of rice, have necessitated strategic adjustments in export policies. By lifting restrictions and reducing duties, the government is ensuring that Indian rice remains accessible in global markets, even amidst challenging international conditions.

The timing of these decisions is also significant, as elections are scheduled to take place in Jharkhand and Maharashtra next month. Sources indicate that the Election Commission has approved the duty cuts, on the condition that no political advantage is sought from these decisions. The government’s focus remains on the broader economic benefits of these export measures, rather than any immediate political gains.

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