India scraps export tax on parboiled rice to boost exports

Representational image of rice grains being winnowed at a paddy field in Kerala. India has revoked the export duty on parboiled rice
| Photo Credit: K.K. Mustafah

The Union Government has scrapped the export tax on parboiled rice, it said in an official order on Tuesday (October 22, 2024), as inventories across India — the world’s biggest exporter of the grain — surged and the country is set to produce a bumper crop after copious monsoon rains.

The decision to remove the tax follows last month’s move to reduce the duty to 10% from 20% to boost exports.

Last month, the government also gave the go-ahead for exports of non-basmati white rice to resume. But New Delhi set a floor price for non-basmati white rice exports at $490 a metric ton.

Bigger rice shipments from India would beef up overall global supplies and soften international prices by forcing other major exporters — such as Pakistan, Thailand and Vietnam — to reduce their rates, trade and industry officials said.

Confidence in new season crop

The decision to remove the export tax on parboiled rice signals the government’s confidence about the new season crop, said Dev Garg, vice-president of the Indian Rice Exporters Association.

Duty-free exports of parboiled rice would encourage price-sensitive African buyers to step up purchases from India, said B.V. Krishna Rao, president of the Rice Exporters’ Association.

India also scrapped the 10% export duty on husked brown rice and rice paddy, the order said.