Rice exporters move Apex Court for relaxation of export ban, cite global contracts
By Timsy Jaipuria
As India continues the ban on rice exports, which kicked in on July 20, to ensure that the country had sufficient stock for domestic consumption and to cool prices, several rice exporters are considering to challenge the decision of the government in the court, seeking an urgent relaxation on the ban to meet global contracts signed by them prior to the ban came into the effect, said industry sources, who did not wish to be named.
Rice exporters, who did not wish to be quoted said, “a few exporters have already exercised this legal option and many others are preparing to do so.”
One such case has already reached the supreme court, where Rika Global Impex Ltd has approached the Supreme Court, where the top court has issued Notice in Writ Petition under Article 32 Challenging Non-basmati Rice Ban Notifications to the Union of India, Directorate General of Foreign Trade (DGFT), and National Cooperative Exports Limited.
In response to this Writ Petition filed by Rika Global Impex Ltd.– the petitioner has challenged the validity of two notifications issued by the DGFT prohibiting the export of “Non-Basmati White Rice.”
“The first notification, No. 20/2023, dated 20th July 2023, prohibits the export of “Non-Basmati White Rice” with effect July 20, 2023. The second notification, No. 32/2023, dated 25th September 2023, permits the export of only 75,000 MT of “Non-Basmati White Rice” to the UAE, but only through the National Cooperative Exports Limited” claims the petitioner.
The Division Bench, of apex court comprising of Justice B.V. Nagarathna and Justice Nongmeikapam Kotiswar Singh, upon the arguments of the petitioner that “approximately 1.3 crore kilograms of rice procured by the Petitioner prior to the issuance of Notification No. 20/2023 is currently stored in a warehouse,” and the petitioner is unable to fulfill its contractual obligations to export this rice, despite having received payments before the publication of the said notification.
The petitioner also says that the prohibition on export of non-Basmati rice has been a subject matter of dispute before different High courts which have taken diverse views on the issue. Given this, the petitioner pleaded before the supreme court and has sought export of rice but also challenges the validity of these notifications.
“The Indian exporters are facing genuine difficulty in cases when the contract for export of rice and the payment date are prior to the date of the notifications imposing restrictions on export of rice. As these are global contracts agreed on predetermined terms and conditions, the Indian businesses may face bigger challenge of arbitration and damages on non-fulfilment of their obligation to supply,” said Abhishek A Rastogi, founder of Rastogi Chambers, who is representing, Indian exporters.
“The other challenge remains that rice, being an edible product, can be kept in the cold storages only up to a particular time” added Rastogi.
This article has been republished from The CNBCTV18.