On September 28, the government has removed a blanket ban on overseas shipments of non-basmati white rice. And it has also imposed a minimum export price (MEP) of $490 per ton.
This export ban was imposed by the government of India on July 20, 2023, to stabilize domestic supply. This decision will influence India’s agriculture sector and the global rice trade.
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A New Chapter for Non-Basmati White Rice Exports
This announcement will mark a shift in India’s rice export policy. The Directorate General of Foreign Trade confirmed the amendment, stating that the export policy for non-basmati white rice, whether semi-milled or wholly milled, has changed from prohibited to free, provided the MEP of $490 per ton is met. This change takes effect immediately and will remain in place until further notice.
By setting an MEP, the government aims to maintain a balance between supporting domestic consumers and allowing farmers to benefit from global market demand.
Lowering Export Duties: A Boost for Parboiled and Brown Rice
Alongside the easing of restrictions on non-basmati white rice, the Indian government has also announced a reduction in export duties on other rice varieties. On September 27, the revenue department under the finance ministry issued a notification lowering the export duty on parboiled rice from 20% to 10%. Husked (brown rice) and rice in the husk (paddy or rough) will also see their export duties reduced to 10%, down from the previous 20%.
By reducing the export duties, India is signaling a more open approach towards the rice trade, which could have a stabilizing effect on global rice prices.
Impact on Basmati Rice and Global Market Dynamics
India’s recent changes in export policies have had a noticeable impact on the basmati rice market as well. During the first four months of this fiscal year (April to July), India’s basmati rice exports surged by 20%, reaching 1.9 million metric tons, despite the earlier restrictions.
India and Pakistan are the only growers of premium basmati rice, and due to the India’s decision to restrict shipments has helped Pakistan to gain market share in some categories.
However, India's basmati exports continue to supply the rising demand from countries like Canada, Iraq, Oman, Saudi Arabia, and the United Kingdom.
A Strategic Shift in India’s Agricultural Policies
Removal of the blanket ban from non-basmati white rice and the reduction in export duties for other rice varieties indicate a strategic shift in India’s agricultural policies.
By allowing more flexibility in rice exports, the government is looking to boost the incomes of Indian farmers and enhance the country’s position in the global rice market.
This policy of India to remove the ban will be welcomed by farmers. It will ensure the competitiveness of Indian rice in the global market. As the world’s second-largest producer of rice, India will meet the needs of an international market shaping the future of this essential staple.
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