India Sets 20% Export Duty on Parboiled Rice; Minimum Export Price on Basmati Looms

To counteract a surge in shipments following the July 20 ban on exports of non-basmati white rice, the Indian Central Government has imposed a 20% export duty on parboiled rice. As specified by the Ministry of Finance in a recent notification, this export duty is effective immediately and will last until October 15. There are also plans to establish a minimum export price (MEP) for basmati rice, ensuring that other rice types are not misrepresented and exported under its name.

Exporters who had established contracts before the official announcement are permitted to continue their shipments with zero duty until the October 15 deadline. The mid-October date is anticipated to be when the Union Government will have adequate insight into the kharif rice production. Prices of rice, especially in South-East Asia, are expected to witness inflation due to the new 20% duty, with current quotations for Indian parboiled rice standing at $500 per tonne.

This imposition on rice exports is part of a broader strategy to curb inflation, ensuring more rice remains available domestically. As for basmati rice, its export will be contingent on a registered contract with the agri-export promotion body, Apeda. Despite a 4% increase in paddy acreage this kharif season compared to the previous year, the crop condition in the southern states appears unfavorable due to deficient rainfall in many regions.