In response to a surge in non-basmati white rice exports and concerns over domestic supply and price stability, the Government of India has taken decisive action. The government swiftly modified the Export Policy of Non-Basmati White Rice from ‘Free with export duty of 20%’ to ‘Prohibited,’ with immediate effect. This measure aims to guarantee a sufficient presence of non-basmati white rice in the Indian market and alleviate price surges, especially during the festive season.
Background
On September 8, 2022, the government imposed a 20% export duty on non-basmati white rice to stabilize domestic prices and ensure ample availability. Despite this measure, the export volume of this rice variety witnessed a significant increase of 35% in the first quarter of the current fiscal year, as compared to the same period in the previous year. This unexpected surge in exports raised concerns about the availability and affordability of rice in the Indian market.
Factors Contributing to Increased Exports
Several factors have contributed to the sharp increase in non-basmati white rice exports. Geopolitical scenarios and global weather conditions have significantly impacted international rice prices. Events like El Nino and extreme climatic conditions in other rice-producing countries have caused fluctuations in supply, leading to higher prices in the international market. As a result, foreign buyers turned to India as a reliable source of non-basmati white rice, driving up the export volumes.
Impact on Consumers and Farmers
The decision to prohibit non-basmati white rice exports is expected to have a positive impact on Indian consumers and farmers. With a sufficient supply of non-basmati rice in the domestic market, prices are likely to stabilize or decrease, providing relief to consumers during the festive season and beyond. The move will ensure that rice remains affordable, a crucial aspect given the staple’s importance in the Indian diet.
Farmers, on the other hand, will not be adversely affected by the export ban. The prohibition only applies to non-basmati white rice, while exports of other rice varieties, such as non-basmati par-boiled rice and basmati rice, will continue unhindered. This allows farmers to continue benefiting from remunerative prices in the international market for these specific rice types.
Exports of Basmati and Non-Basmati Rice
In recent years, India has seen a substantial growth in its rice exports, including both basmati and non-basmati varieties. Basmati rice exports reached $4.8 billion in the year 2022-23, with a volume of 45.6 lakh tonnes. On the other hand, non-basmati rice exports stood at $6.36 billion, with a volume of 177.9 lakh tonnes during the same period. Major destinations for non-basmati white rice exports include Thailand, Italy, Spain, Sri Lanka, and the USA.
Exceptions to the Export Ban
While the government has imposed a blanket ban on non-basmati white rice exports, there are a few exceptions. Consignments of non-basmati white rice that have already commenced loading onto ships before the notification will still be allowed to be exported. Additionally, exports may be permitted under specific circumstances, such as meeting other countries’ food security needs and upon the request of their respective governments. These exceptions will ensure that India continues to engage in responsible trade practices and maintains its commitment to global food security.