By Rajendra Jadhav, Mayank Bhardwaj and Urvi Manoj Dugar

NEW DELHI, Oct 22 (Reuters) – India scrapped the export tax on parboiled rice, the government said in an official order on Tuesday, as inventories in the world’s biggest exporter of the grain surged and the country is set to produce a bumper crop after copious monsoon rains.

Last month, India reduced the duty to 10% from 20% to boost exports, and gave the go ahead for exports of non-basmati white rice to resume. But New Delhi set a floor price for non-basmati white rice exports at $490 a metric ton.

Prospects for increased rice output could also encourage India to remove the floor price for non-basmati white rice exports, trade and industry officials said.

Bigger rice shipments from India would beef up global supplies and soften international prices by forcing other major exporters – such as Pakistan, Thailand and Vietnam – to reduce their rates, trade and industry officials said.

The decision to remove the export tax on parboiled rice signals the government’s confidence about the new season crop, said Dev Garg, vice-president of the Indian Rice Exporters Federation.

India’s parboiled rice exports fell 13% to 5.1 million metric tons during the first eight months of 2024.

Duty-free exports of parboiled rice would encourage price-sensitive African buyers to step up purchases from India, said B.V. Krishna Rao, president of the Rice Exporters Association.

India also scrapped the 10% export duty on husked brown rice and rice paddy, the order said.

As the El Nino weather pattern in 2023 raised the spectre of poor monsoon rains, India imposed various curbs on rice exports and extended them into 2024 to keep local prices in check ahead of the April-June national election.

Since the 2023 ban on exports, local supplies have picked up, bumping up stocks at government warehouses.

Published Date: October 23, 2024