Will India Resume Export of Non-Basmati Rice? Decision Likely This Week

India, the world's largest rice exporter, is set to review the decision to ban the export of non-basmati rice, a year after it was imposed to control domestic prices. The decision, expected this week, could have significant implications for global rice markets and India's agricultural economy.

The export ban, enacted in July 2023, aimed to curb rising domestic rice prices. In 2022, India exported 22.2 million tonnes of rice, of which 17.86 million tonnes were non-basmati rice. The major rice-producing states, including Punjab, Chhattisgarh, Odisha, Andhra Pradesh, West Bengal, and Uttar Pradesh, have been closely monitoring the situation, as they hold substantial stakes in the rice export market.

Several recommendations are currently under consideration:

1. Allowing the export of non-basmati rice with a minimum export price.

2. Removing the duty on the export of parboiled rice.

The decision will hinge on an assessment of the current rice crop and whether there is enough buffer stock to meet domestic demand for the next two years. This week’s deliberations follow appeals from many exporters to the Ministry of Commerce on July 5, urging the government to lift the ban. Exporters have highlighted the loss of market share to competitors from Thailand and Pakistan as a significant concern.

While the ban was comprehensive, the government had permitted limited exports under specific conditions, including sales from the Indian government to other governments. Additionally, basmati rice exports were allowed as long as they were priced at $1,200 per tonne or higher.

Rice exporters from key producing states such as Punjab, Haryana, and Uttar Pradesh have urged the inter-ministerial committee to reduce the minimum export price for basmati rice. They argue that the high export price has led to a decline in orders at global food fairs, affecting their competitiveness in the international market.

In the financial year ending March 2024, rice exports dropped to 15.7 million tonnes due to the ban. Countries that traditionally import large quantities of rice from India, such as Malaysia, Singapore, Djibouti, Qatar, and Iraq, have felt the impact of reduced supply.

As the government prepares to announce its decision, stakeholders from various sectors are hopeful for a favorable outcome that balances domestic needs with international trade interests. The outcome will not only affect India's rice farmers and exporters but also have a ripple effect on global rice prices and food security.