India - Central Government prohibits export of Non-Basmati White Rice; Small & marginal farmers to be impacted

The government of India has amended the Export Policy of Non-Basmati White Rice from ‘Free with export duty of 20%’ to ‘Prohibited’ with immediate effect. This has been done to ensure adequate availability of Non-Basmati White Rice in the Indian market and to allay the rise in prices in the domestic market.

The domestic prices of Rice are on an increasing trend. Retail prices have increased by 11.5% over a year and 3% over the past month.

Acting on the prohibition notification, Saurabh Sanyal, CEO & Secretary General of PHD Chambers of Commerce submitted a representation to Santosh Kumar Sarangi (IAS) Additional Secretary & Director General of Directorate General of Foreign Trade (DGFT) requesting amendments. The Chamber mentioned that this notification will lead to financial losses for small and marginal farmers and will have a negative impact on small, medium, and micro industries.

An export duty of 20% on non-basmati white rice was imposed on 8th September 2022 to lower the price as well as ensure availability in the domestic market. However, the export of this variety increased from 33.66 LMT (Sept-March 2021-22) to 42.12 LMT (Sept-March 2022-23) even after the imposition of a 20% export duty. In the current FY 2023-24 (April-June), about 15.54 LMT of this variety of rice was exported against only 11.55 LMT during FY 2022-23 (April-June), i.e. an increase of 35%. This sharp increase in exports can be ascribed to high international prices due to the geopolitical scenario, El Nino sentiments and extreme climatic conditions in other rice-producing countries, etc.

Non-Basmati White Rice constitutes about 25% of total rice exported from the country. The prohibition on the export of Non-Basmati White Rice will lead to a lowering of prices for the consumers in the country.

However, there is no change in the Export policy of Non-Basmati Rice (Par Boiled Rice) and Basmati Rice, which forms the Bulk of Rice exports. This will ensure that the farmers continue to get the benefit of remunerative prices in the international market.