The Indian Rice Exporter’s Federation has urged the Centre to provide a 4% interest subvention on export credit, 3% road and rail freight support, and ensure timely disbursal of duty remission schemes.

Rahul Goreja New Delhi

The Indian Rice Exporter’s Federation (IREF) has sought fiscal support from the Centre in the upcoming Union Budget, urging tax incentives, interest relief and freight assistance to boost the sector’s competitiveness. 

The industry group said that it has submitted recommendations to the Union Finance Minister Nirmala Sitharaman, seeking a 4 per cent interest subvention on export credit, 3 per cent road and rail freight support, and timely disbursal of duty remission schemes, reported PTI. It also sought a one-time waiver of retrospective duty demands linked to the 20 per cent export duty on certain rice varieties. 

“These measures will directly lower exporters’ costs, incentivise sustainability, and encourage scaling of value-added shipments,” IREF president Prem Garg said.

India, the world’s largest rice exporter, accounts for about 40 per cent of global trade. A Reuters report in December 2025 said government rice stocks rose nearly 12 per cent year-on-year to a record high after state agencies ramped up procurement of the new-season paddy crop. Reserves stood at 57.57 million tonnes as of December 1, far exceeding the government’s target of 7.61 million tonnes.

Despite the government buying heavily, traders still have plenty of stock for exports, the report added. 

“Rice exports remain a strategic economic asset supporting farm incomes, rural employment and the external sector,” Garg said. At the same time, he flagged challenges such as groundwater depletion in major paddy belts, high procurement and storage costs, and price volatility.

He further added that Budget 2026 can strengthen competitiveness while improving sustainability and farmer outcomes through targeted fiscal and enabling measures. 

Here is a look at key demands from IREF:

IREF has urged the Centre for tax and investment incentives linked to verified water-saving and low-emission practices, including Alternate Wetting and Drying (AWD), Direct Seeded Rice (DSR), laser land levelling and energy-efficient milling. 

It also sought to encourage a shift towards higher-value varieties, such as premium basmati and GI, organic and speciality non-basmati rice to improve farmer realisation and reduce reliance on minimum support price procurement. 

The trade body also demanded a 4 per cent interest subvention on export credit, with priority for MSME firms. IREF said that these measures could reduce financing costs, ease cash flow, and improve price competitiveness.

On logistics, IREF proposed reimbursement of 3 per cent on eligible domestic freight for export-bound rice movements from production clusters to ports and inland container depots, with simpler digital claims. The move, it argued, would lower logistics costs, cushion freight volatility and help inland exporters remain competitive. 

It also sought the continuation and appropriate calibration of Remission of Duties and Taxes on Exported Products (RoDTEP) for rice to offset embedded taxes. 

The trade body also sought a one-time waiver of retrospective duty demands that emerged after a 20 per cent export duty was imposed on certain rice varieties last year. IREF said differing interpretations of the duty base and calculation methods by field authorities and exporters had led to unintended discrepancies.

“This has resulted in large, retrospective duty demands and prolonged disputes, despite exports being undertaken in good faith and without any undue gain,” the federation said. It said that a waiver would reduce litigation, provide relief to compliant exporters and support stability in the sector. 

(With inputs from PTI)

Published Date: January 7, 2026