India bans export of non-basmati rice to boost domestic availability

The government increased the export tax on non-basmati “white” rice by 20% on Thursday, which is anticipated to reduce the overall export volume in the current fiscal year. The export tax will be in effect starting this Friday, according to a notification from the finance ministry. According to exporters, white rice accounted for over 60% of the 17 million tonnes (mt) in total non-basmati rice exports in 2021–22, with the remaining shipments of par-boiled rice being exempt from export duties.

According to V Krishna Rao, president of the All India Rice Exporters Association, “our concern is whether this export duty will be applied to approximately 2 mt of white rice consignment in the transit.” The introduction of an export tax will undoubtedly lower the amount of rice exported this fiscal year and increase the price of rice from India.
At the moment, India is selling a tonne of non-basmati rice for about $360. Additionally, the finance ministry placed a 20% export charge on brown rice that has been husked as well as paddy rice.

In the last ten years, India has been the greatest rice exporter in the world; export revenues totaled $8.8 billion in 2020–2021 and $9.6 billion in 2021–2022 respectively. India’s rice exports increased 12% to $2.6 billion in value in the first quarter of the current fiscal year compared to the same period last year, according to figures from the commerce ministry. As a result, rice will remain affordable for the general public, according to Saurab Agarwal, the tax partner at EY. Rice output is anticipated to decrease from a record 130 mt achieved in the 2021–2022 crop year due to a 5% decrease in paddy seeding this Kharif season due to insufficient rainfall in important paddy growing districts of West Bengal, Uttar Pradesh, Jharkhand, and Bihar.

In its August rice forecast report, the United States Department of Agriculture (USDA) predicted that India’s rice exports will reach a record 22 MT in 2022–2023. The expected exports of that nation, according to the USDA, are greater than the sum of shipments from the following three biggest exporters: Thailand, Vietnam, and Pakistan. India exported more than 17 mt of non-basmati rice out of the 21 mt of rice that was sent in 2021–2022; the remaining volume was made up of aromatic, long-grain Basmati rice. Bangladesh, China, Benin, and Nepal are the top four rice export destinations in terms of volume.

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