India imposes 20% export duty on non-Basmati rice

The Centre on Thursday imposed an export duty of 20% on rice, brown rice, and semi-milled as well as wholly milled rice except for parboiled rice to boost domestic supplies, effective September 9.

According to a notification by the Revenue Department, an export duty of 20% has been imposed on ‘rice in husk (paddy or rough)‘ and ‘husked (brown) rice’.

The notification issued by the Centre, announcing export duty of 20% on rice, brown rice, and semi-milled as well as wholly milled rice, on September 8, 2022. Photo: Special Arrangement

The development comes in the wake of concerns about lower paddy sowing by farmers this Kharif season amid uneven monsoons in parts of the country, that have exacerbated inflationary expectations and nudged up retail prices for rice in recent weeks.

The Central Board of Indirect Taxes & Customs further said the export of ‘semi-milled or wholly-milled rice, whether or not polished or glazed(other than Parboiled rice and Basmati rice)‘ will also attract a customs duty of 20 per cent.

The export duty will come in force from September 9, the notification added.The area under the paddy crop has been down by 5.62% at 383.99 lakh hectares in the ongoing Kharif season so far due to poor rains in some states, as per the latest data released by the Agriculture Ministry.

India, the world’s second-largest rice producer after China, commands a 40% share in the global trade.

The country exported 21.2 million tonnes of rice in the 2021-22 fiscal year, of which 3.94 million tonnes were Basmati rice. It exported non-Basmati rice worth $6.11 billion in the same period, as per official data.

The country exported non-Basmati rice to more than 150 countries in 2021-22.

Welcoming the export duty, former president of All India Rice Exporters Association Vijay Setia said Indian rice was being exported at a “very low price”. The export duty would lead to a reduction in non-Basmati rice shipments by 2-3 million tonnes, but the realisation from the exports would remain the same because of the 20% duty.

“It is a good decision in view of fall in paddy acreage,” Mr. Setia said.

The association’s current president Nathi Ram Gupta said the export of raw rice from southern parts of the country would be impacted, but shipments of parboiled may go up.

Paddy is the main Kharif crop, sowing of which begins with the onset of the southwest monsoon in June and harvesting starts from October onwards.

Rice production rose to a record 130.29 million tonnes in the last crop year as against 124.37 million tonnes in 2020-21.

The government has already restricted exports of wheat.