To keep domestic prices in check, the Centre imposed a 20% export duty on parboiled rice.

In order to secure a continuous supply of rice in India and prevent price increases or to keep domestic prices in check, the Centre has imposed a 20% export levy on parboiled rice. The notification, issued by the Ministry of Finance on Friday, August 25, will stay in effect until October 16, 2023.

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Exemptions and Relief

However, the government has also established a relief plan for select circumstances. Shipments of parboiled rice held at customs ports without "let export order" (LEO) permission and accompanied by legal "letters of credit" (LCs) issued before August 25, 2023, will be free from this export duty.

India has now implemented limits on all varieties of non-basmati rice, which account for almost a fifth of the country's overall rice exports.

Domestic Prices of Basmati Rice on Check

The notification comes in the wake of a July 2023 restriction on the export of non-basmati white rice in order to balance the domestic rice market. Furthermore, Food Secretary Sanjeev Chopra recently revealed that India put a supplementary stock of two lakh metric tonnes (LMT) into the market in order to keep prices stable.

Increased Exports resulted in Higher Prices

Non-basmati white rice exports increased to 15.54 lakh tonnes in the first quarter of the current fiscal year, up from 11.55 lakh tonnes in the same period last year, according to data from the first quarter of the current fiscal year. This increase in exports influenced the decision to establish limits in order to contain the growing cost of this crucial food crop.

Among these indicators, India has seen a rise in retail or consumer price inflation, which reached a 15-month high of 7.44 percent in July, up from 4.87 percent in June, owing primarily to rising food prices.

According to the annual data, India is a big player in the worldwide rice market. For the fiscal year 2022-23, basmati rice exports totaled $4.8 billion in value and 45.6 lakh tonnes in volume. Concurrently, non-basmati rice exports totaled $6.36 billion in value and 177.9 lakh tonnes in volume during the preceding fiscal year.

According to Ministry of Agriculture data, India's rice production is expected to increase to 135.54 million tonnes in the 2022-23 crop year (July-June) from 129.47 million tonnes the previous year.