The decision has been made effective from October 22.

By Shishir Sinha

In an effort to further boost exports, the Finance Ministry has lowered Custom Duty to NIL from 10 per cent on parboiled rice, husked (brown) rice and rice in the husk (paddy or roughy). It has been made effective from October 22.

The decision has been taken at a time when a model code of conduct is in place because of polling in two states – Maharashtra and Jharkhand. However, Finance Ministry officials said that the decision has been taken fulfilling all the pre-requirements. “May kindly note that Election Commission has given clearance to issue the notification subject to the condition that no political mileage is derived out of the same by anyone anywhere,” an official said.

This is second cut within a month. Earlier on September 26, the Ministry cut the export duty on non-basmati parboiled rice, husked (brown) rice and rice in the husk (paddy or rough) to 10 per cent from 20 per cent with immediate effect. Also, semi-milled or wholly-milled rice, whether or not polished or glazed (other than parboiled rice and Basmati rice) allowed duty-free.

The Indian government imposed the 20 per duty on these agricultural produce in August 2023 after the emergence of El Nino resulted in deficient rainfall in key paddy-growing areas. In July 2023, the Centre imposed a ban on exports of white rice due to fears that deficient rainfall would affect rice production. Earlier in September 2022, it imposed a 20 per cent duty on white rice exports which has already been made zero. It also banned exports of broken rice at the same time.

Last month itself, the government lifted the ban on non-basmati white rice exports with immediate effect. But it imposed a $490 a tonne minimum export price (MEP)

Despite El Nino affecting a fourth of the country, rice production was estimated at a record 137.83 million tonnes by the Ministry of Agriculture earlier this week. It is higher than the 135.76 million tonnes produced in 2022-23.

The ban resulted in India’s non-basmati rice exports dropping to 11.12 million tonnes in the 2023-24 fiscal compared with 17.79 million tonnes in 2022-23. This year, the kharif area under rice has increased higher than the normal 401.55 lakh hectares to 409.5 lakh hectares. However, excess rains in some of the growing areas such as Telangana, Andhra Pradesh, Jharkhand and southern West Bengal have raised concerns over the conditions of paddy crop.

India’s ban resulted in prices of rice increasing in the global market to nearly $600 a tonne. Thailand, Vietnam and Pakistan gained due to India’s rice export curbs.

Published Date: October 23, 2024