The Indian government has lifted its non-basmati white rice export ban, imposed in July 2023 to stabilize rising domestic prices. The decision, announced on Saturday, marks a reversal in trade policy aimed at bolstering agricultural exports while balancing local food security.
According to a notification from the Directorate General of Foreign Trade, the export of all varieties of white rice is now permitted, subject to a minimum export price (MEP) of $490 per tonne. The MEP is a safeguard to ensure rice is not sold below this price to international buyers, preventing cheap mass exports that could undermine domestic supply and pricing stability.
This move is part of a broader easing of export restrictions that the Indian government introduced to control food inflation over the last two years. These measures were primarily driven by fluctuating weather patterns that affected crop yields and triggered food price volatility.
India’s consumer inflation cooled to 3.65% in August 2024, the lowest in nearly five years, with food inflation also moderating to 5.35% compared to 9.94% in the same month of the previous year. As inflationary pressures ease, the government has been gradually lifting restrictions.
On September 14, the export MEP on basmati rice of $950 per tonne was removed, alongside an earlier decision to scrap the $550 per tonne MEP on onions, introduced after the country experienced a sharp 20% drop in onion output due to irregular rainfall.
The decision to relax rice export restrictions comes as India, the world’s largest rice exporter, with over 40% of global shipments, feels confident in its food grain reserves. Food Minister Pralhad Joshi previously indicated the government’s consideration to rise exports, given the current strength of domestic stocks.
Rice exports from India had seen a significant decline, dropping by nearly 34% during the April-June 2024 period to 3.2 million tonnes, largely due to the export ban on non-basmati white rice. The easing of this ban signals the government’s strategy to recalibrate its approach in response to improving inflation conditions, allowing India to reassert itself as a key player in the global rice market while safeguarding domestic food security.
POLICY & LAW | India Removes Basmati Rice Export Floor Price to Boost Global Trade
