The removal of the duty reflects the government’s confidence in a better harvest this year, said Vijay Setia, former president of the All-India Rice Exporters Association.

Dhirendra Kumar

New Delhi: The union government has removed the export duty on parboiled rice, according to a notification issued by the finance ministry late on Tuesday.

It also removed the minimum export price (MEP) of $490 per tonne on overseas shipments of non-basmati white rice with immediate effect, according to a notification issued by the Directorate General of Foreign Trade (DGFT) on Wednesday.

In late September, the government had cut the export duty on parboiled rice from 20% to 10% and approved the resumption of non-basmati white rice exports, but set the MEP of $490 per metric tonne. 

The latest decision is expected to give a major boost to rice exporters, who have been facing challenges in the global market because of the export duty. It is also expected to ease the storage burden as India’s granaries are full.

By removing the 10% duty, the government aims to stabilise India’s rice exports and meet the growing international demand, particularly from markets in Africa and Southeast Asia.

Record production expected

According to final estimates released by the agriculture ministry, India is set to achieve record foodgrain production of 332.29 million tonnes (mt) in the 2023-24 agricultural year, which runs from July to June. This represents an increase of 2.61 mt from the previous year’s total of 329.68 mt. The growth has been attributed to favourable production in key categories such as rice, wheat and millets.

Rice production in 2023-24 was a record at 137.83 mt, an increase of 2.07 mt (1.52%) from 135.76 mt the previous year. Wheat production also hit a new high at 113.29 mt, up 2.74 mt (2.48%) from 110.55 mt in 2022-23, the data showed.

A good harvest of rice and wheat is crucial for maintaining food security in the world’s most populous country.

‘Govt confident of a better harvest’

“The removal of the export tax on parboiled rice reflects the government’s confidence in a better harvest for the upcoming season,” said Vijay Setia, former president of the All-India Rice Exporters Association.

The ban on export of non-basmati white rice was announced last July to safeguard domestic food security and protect consumers from price shocks while ensuring farmers received decent prices, as El Niño disrupted rainfall and hampered crop output.

On 27 September, the union government halved the export duty on parboiled rice from 20% to 10% as granaries were filled with the previous year’s paddy stock. Procurement of the new crop began on 1 October. On 28 August, Mint reported that the government was looking at relaxing restrictions on rice exports as paddy sowing was expected to set a record this year.

In FY24, India exported a total of 15.7 million tonnes of rice – including 2.36 million tonnes of non-basmati white rice, 545,000 tonnes of broken rice, and 7.57 million tonnes of parboiled rice – against 21.8 million tonnes in FY23.

In mid-September, the government had scrapped the minimum export price for basmati rice to boost outbound shipments and enhance farmers’ income. From April to August, India exported non-basmati white rice worth $201 million. Despite the export ban, the government permitted shipments to friendly nations such as the Maldives, Mauritius, the UAE, and several African countries.In FY24, India exported a total of 15.7 million tonnes of rice – including 2.36 million tonnes of non-basmati white rice, 545,000 tonnes of broken rice, and 7.57 million tonnes of parboiled rice – against 21.8 million tonnes in FY23.

In mid-September, the government had scrapped the minimum export price for basmati rice to boost outbound shipments and enhance farmers’ income. From April to August, India exported non-basmati white rice worth $201 million. Despite the export ban, the government permitted shipments to friendly nations such as the Maldives, Mauritius, the UAE, and several African countries.

Published Date: October 23, 2024