India exempts parboiled rice and brown rice from export duty to boost shipments

The central government has exempted parboiled rice and brown rice from export duty. According to a notification issued by the Finance Ministry on Tuesday night, export duty has been reduced from 10 per cent to 'nil' on parboiled rice, husked (brown) rice and rice in the husk (paddy or rough). The duty cut is effective from October 22. The Election Commission approved this decision on the condition that it would not be used for political mileage.

Last month, on September 27, the government reduced the export duty on parboiled and brown rice from 20 percent to 10 percent. Non-basmati white rice was also exempted from export duty, but a minimum export price (MEP) of $490 per ton was imposed. On September 13, the government scrapped the MEP on basmati rice to boost shipments. Amid a drop in paddy prices, these measures by the central government are being viewed in the context of the upcoming assembly elections in Jharkhand and Maharashtra.

With the arrival of the new paddy crop, the price of regular paddy has fallen below the minimum support price (MSP) of Rs 2,320 per quintal, while the price of the 1509 variety of basmati paddy is Rs 500-700 less than last year. The government is now attempting to increase paddy exports by removing export duties and other restrictions to help farmers secure better prices.

Thanks to a good monsoon this year, a record 13.78 crore tonnes of rice production is expected in the country. The Kharif paddy sowing area has increased to 414.50 lakh hectares, which is larger than last year's area and above the five-year average.

As of October 1, the central pool had a stock of 310.59 lakh tonnes of rice, about 40 percent more than last year and the highest in two decades. With a bumper crop and adequate food grain stock, the Indian government is well-positioned to boost rice exports. A notification may soon be issued to remove the $490-per-tonne MEP on non-basmati white rice.

Due to export restrictions, the export of non-basmati rice in the financial year 2023-24 has decreased to 111.2 lakh tonnes, down from 177.9 lakh tonnes last year. This year, the export of parboiled rice has also declined by about 13 percent. Thailand, Vietnam, and Pakistan benefited from India's rice export restrictions. With an increase in India's rice exports, the global supply is expected to rise, potentially lowering rice prices. Rice exporters hope that African countries will increase their purchases from India due to the duty-free export of parboiled rice.