Govt Exempts Non-Basmati White Rice From Export Duty, Sets Floor Price At USD 490/Tonne

Earlier this month, the government scrapped the minimum export price for basmati rice to boost outbound shipments and enhance farmers' income.

New Delhi: Withdrawing a blanket ban on overseas shipments of non-basmati white rice, the government on Saturday imposed a floor price of USD 490 per tonne and exempted the commodity from export duty. Exports of non-basmati white rice have been banned since July 20, 2023, to boost domestic supply.

"The export policy for non-basmati white rice (semi-milled or wholly milled rice, whether or not polished or gazed) ...is amended from prohibited to free, subject to MEP (minimum export price) of USD 490 per tonne with immediate effect and until further orders," the directorate general of foreign trade (DGFT) said in a notification.

The measures came at a time when the country has ample stock of rice at government godowns and retail prices are also under control. The government has exempted non-basmati white rice from export duty while reducing the levy on parboiled rice to 10 per cent. The duty cut came within a fortnight of the government's decision to remove the minimum export price of basmati rice.

In a notification issued on Friday, the revenue department under the finance ministry said it has also reduced export duty on husked (brown rice), and rice in the form of husk (paddy or rough) to 10 per cent. The export duty on these varieties of rice as well as non-basmati white rice was 20 per cent so far. These duty changes are effective from September 27, 2024, the notification said.

Earlier this month, the government had scrapped the minimum export price for basmati rice to boost outbound shipments and enhance farmers' income. The country has exported non-basmati white rice worth USD 189 million during April-July this fiscal. It was USD 852.52 million in 2023-24. Though there was a ban on the exports, the government was allowing the shipments to friendly nations like Maldives, Mauritius, the UAE and African countries.

The export permission was granted by the government of India to other countries to meet their food security needs and based on the request of their governments. This variety of rice is widely consumed in India and it also has demand in global markets, particularly in nations which have large Indian diaspora.

In 2023-24, the country exported the commodity to 17 nations -- Bhutan (79,000 MT - metric tonnes), Mauritius (14,000 MT), Singapore (50,000 MT), UAE (75,000 MT), Nepal (95,000 MT), Cameroon (1,90,000 MT), Cote d' Ivore (1,42,000 MT), Guinea (1,42,000 MT), and Malaysia (1,70,000 MT). The other countries are Philippines (2,95,000 MT), Seychelles (800 MT), Comoros (20,000 MT), Madagascar (50,000 MT), Equatorial Guinea (10,000 MT), Egypt (60,000 MT), Kenya (1,00,000 MT), and Tanzania (30,000 MT).

Certain member countries of the World Trade Organisation (WTO), including the US, have earlier raised concerns over the prohibition on exports. India has rejected their concerns stating that the export ban on rice is a regulation rather than a restriction and is crucial for securing the food security of the country's 1.4 billion people.

The US had urged India to lift this export ban with immediate effect. Those countries had argued that such measures had a detrimental impact on nations which are heavily reliant on imports of these agri commodities, particularly during crises. The ongoing war between Russia and Ukraine is among one of the factors that have disrupted the foodgrain supply chain.

The government earlier this month also scrapped a minimum price threshold for exports of onion as it looked to pass on the benefit of international glut to Indian farmers.