India plans to reduce the floor price for basmati rice exports and replace the 20 percent export tax on parboiled rice with a fixed duty as rice inventories hit a record high.
India is likely to cut the minimum export price for basmati rice to $800–$850 per metric ton from $950 and replace the 20 percent export tax on parboiled rice with a fixed duty, according to government sources. This move comes as the country’s rice stocks at state warehouses surged to a record 48.51 million metric tons as of July 1, nearly 19 percent higher than last year, reported the Food Corporation of India.
The world’s largest rice exporter imposed various export curbs in 2023 and continued them into 2024 to stabilise local prices ahead of the general elections in April-May. The expected reduction in the basmati rice floor price aims to boost shipments and maintain India’s market share against Pakistan, which saw record rice exports this year due to India’s restrictions.
India exports over 4 million metric tons of basmati rice annually to countries including Iran, Iraq, Yemen, Saudi Arabia, the UAE, and the United States. Additionally, the government plans to replace the current 20 percent export tax on parboiled rice with a minimum export tax to prevent under-invoicing.
Last month, Reuters reported that India was considering easing other rice export restrictions, including resuming exports of white rice. Concerns over lower output due to the El Nino weather pattern led to a ban on non-basmati white rice exports and other restrictions in July 2023.
B.V. Krishna Rao, president of the Rice Exporters Association, emphasized the need to lift export restrictions to reduce stockpiles and prevent spoilage, given the surplus in rice supplies.
