In a bid to ensure a steady supply of rice in India and prevent soaring prices, the Centre has introduced a 20 percent export duty on parboiled rice. The notification, shared by the Ministry of Finance on Friday, August 25, with immediate effect, will be applicable until October 16, 2023.
The government, however, has also announced a relief measure for specific cases. Parboiled rice shipments held at customs ports without “let export order” (LEO) approval and supported by valid “letters of credit” (LCs) issued before August 25, 2023, will be exempt from this export duty.
With this, India has now imposed restrictions on all types of non-basmati rice, which constitute approximately a quarter of the nation’s total rice exports.
The notice follows the ban on the export of non-basmati white rice levied in July 2023 to stabilise the domestic rice market. Additionally, Food Secretary Sanjeev Chopra recently announced that India has released an additional stock of two lakh metric tonnes (LMT) in the market to keep prices in check.
In a similar vein, the Indian government recently introduced a 40 percent export duty on onions to increase domestic availability.
Data from the first quarter of the current fiscal year revealed that non-basmati white rice exports surged to 15.54 lakh tonnes, a notable increase from the 11.55 lakh tonnes recorded in the same period last year. This rise in exports played a role in the decision to impose restrictions to curb the escalating prices of this essential food commodity.
Amidst these measures, India has witnessed a spike in retail or consumer price inflation, reaching a 15-month high of 7.44 percent in July, compared to 4.87 percent in June, predominantly driven by surging food prices.
The annual statistics portray India as a significant player in the global rice market. Basmati rice exports registered $4.8 billion in terms of value and 45.6 lakh tonnes in volume for the 2022-23 period. Concurrently, non-basmati rice exports totalled $6.36 billion and 177.9 lakh tonnes in value and volume, respectively, for the previous fiscal year.
As per data from the Ministry of Agriculture, India’s rice production is estimated to have risen to 135.54 million tonnes in the 2022-23 crop year (July-June), up from 129.47 million tonnes in the preceding year.
This article has been republished from CNBC TV 18