The Indian government is contemplating the implementation of a minimum export price (MEP) for various specialty rice types, including the renowned basmati variety. MEP acts as a threshold price, preventing excessive overseas exports to stabilize domestic availability and prices. This measure involves restricting trade volumes when domestic prices surge due to disruptions in production. The concept is grounded in the Foreign Trade (Development and Regulation) Act, 1992, which empowers the Central Government to craft and modify export-import policies through official notifications.
Facts/Terms for UPSC Prelims
- Minimum Export Price (MEP): MEP denotes the lowest price at which a commodity can be exported from a country. Its purpose is to mitigate rapid domestic price hikes and enhance local supply. Typically imposed temporarily, it’s removed when conditions change to aid farmers and exporters in achieving better prices.
- Quantitative Restriction: A trade control method that limits the quantity of specific goods that can be imported or exported during a given period. This aims to manage supply and demand dynamics.
- Domestic Price Surge: Refers to a significant and sudden increase in the prices of goods within a country. This can result from factors like supply shortages or increased demand.
- Foreign Trade (Development and Regulation) Act, 1992: An Indian legislation enabling the Central Government to create, modify, and announce export-import policies via official notifications published in the Official Gazette. This act empowers the government to regulate foreign trade for various purposes.
