Govt imposes 20% export duty on rice amid reduced plantation due to lack of rains

Government of India, on Thursday, imposed a 20 per cent duty on exports of various types of rice to discourage buyers from making purchases from the country and to secure domestic supplies after reduced plantation due to lack of rains.

The Department of Revenue, under the Ministry of Finance, in a statement, said that the 20 per cent duty would be imposed on the export of rice in the husk (paddy or rough), husked brown rice, semi-milled or wholly-milled rice, whether or not polished or gazed (other than Parboiled rice and Basmati rice).

Major rice-producing states - West Bengal, Bihar and Uttar Pradesh - have already raised concerns over rice production due to below-average rainfall in the country. The updated tax rates on exports of various types of rice will come into effect from September 9, it added.

However, the government has excluded parboiled and basmati rice from the export duty. On the other hand, brown and white rice - which accounts for nearly 60 per cent of the country’s total exports - will attract updated tax rates, said BV Krishna Rao, President, All India Rice Exporters Association.

India is also the world’s biggest rice exporter and its rice exports have touched 21.5 million tonnes in 2021, more than the combined shipments of the world's next four biggest rice exporters - Thailand, Vietnam, Pakistan and the United States.

India accounts for more than 40 per cent of global rice shipments and competes with Thailand, Vietnam, Pakistan and Myanmar in the world market. Earlier this year, India also banned wheat exports and restricted sugar shipments.

"With this duty, Indian rice shipments will become uncompetitive in the world market. Buyers will shift to Thailand and Vietnam," Rao said.

According to Himanshu Agarwal, ED, Satyam Balajee, domestic exports would fall at least 25 per cent in the coming months because of the duty.

(With input from agencies)