India cuts export duty on parboiled rice to 10%

The Indian government late on Friday night cut the export duty on non-basmati parboiled rice to 10 per cent from 20 per cent with immediate effect.

In a significant development, the Department of Revenue, an arm of the Finance Ministry, in its Gazezette order said semi-milled or wholly-milled rice, whether or not polished or glazed (other than parboiled rice and Basmati rice) would be allowed duty-free.

This has left the trade confused about the zero duty is a provision to only allow the National Cooperative Export Limited (NCEL) to export white rice at zero duty for Government-to-Government deals. The Centre has nominated NCEL for such deals. 

‘It’s for DGFT’

Lifting the ban on white rice, which has been in force since July 2023, is a policy decision that the Ministry of Finance cannot take. Two Delhi-based trade sources said the Directorate General of Foreign Trade is the authority that has to take the decision.

The Government also cut the duty to 10 per cent for husked (brown) rice and rice in the husk (paddy or rough) with immediate effect.

The Indian government imposed the 20 per duty on these agricultural produce in August 2023 after the emergence of El Nino resulted in deficient rainfall in key paddy-growing areas. In July 2023, the Centre imposed a ban on exports of white rice due to fears that deficient rainfall would affect rice production.

Earlier in September 2022, it imposed a 20 per cent duty on white rice exports. This has now been made zero.  It also banned exports of broken rice at the same time.

Record output

Despite El Nino affecting a fourth of the country, rice production was estimated at a record 137.83 million tonnes by the Ministry of Agriculture earlier this week. It is higher than the 135.76 million tonnes produced in 2022-23.

The ban resulted in India’s non-basmati rice exports dropping to 11.12 million tonnes in the 2023-24 fiscal compared with 17.79 million tonnes in 2022-23. This year, the kharif area under rice has increased higher than the normal 401.55 lakh hectares to 409.5 lakh hectares. However, excess rains in some of the growing areas such as Telangana, Andhra Pradesh, Jharkhand and southern West Bengal have raised concerns over the conditions of paddy crop. India’s ban resulted in prices of rice increasing in the global market to nearly $600 a tonne. Thailand, Vietnam and Pakistan gained due to India’s rice export curbs.