27 Jul 2023

India's Ban On Export Of Rice: Who Will Gain, Who Will Lose?

On July 20, the Government of India took a major decision regarding the export of rice. The export of non-basmati white rice, which is the largest category in rice exports, was banned.

The government said it would restrict exports of non-basmati rice to control domestic rice prices that had risen more than 30% since October 2022.

India is the largest rice exporting country in the world. After this decision, the amount of rice that India exports will now be reduced to almost half. The price of rice in the food markets around the world is likely to rise.

Export increased despite 20 percent export duty

According to the government, the prices of rice were continuously increasing in the domestic market. In order to bring down the price of rice in the domestic market and to ensure its availability, the government had imposed an export duty of 20 percent on the export of non-basmati white rice on August 8 last year so that the export of this type of rice would come down a bit. Despite this, an increase was seen in the export of non-basmati white rice.

Export of non-basmati white rice increased from 33.66 lakh tonnes in March 2021-2022 to 42.12 lakh tonnes in 2022-2023 (September-March).

In the current financial year 2023-24 (April-June), about 15.54 lakh tonnes of non-basmati white rice was exported, which is 35 percent more than the previous year 2022-23 (April-June)

'India's image will be dented'

Trade experts believe that the export ban will hurt India's credibility in the export of rice.

According to the experts, India's image as a big market player will be harmed by this ban. Worldwide 45 million tonnes of rice is exported, out of which India's share is 22 million tonnes. This includes both basmati and non-basmati rice. If you deduct 18 million tonnes from this, it will have a big ipact on the international market. 

Price of rice came down after ban

Rajeev Kumar, executive director of the Rice Association of India, says, "At the domestic level, the price of rice has come down by Rs 4 per kg, so the government's effort to reduce the price of rice has worked. But Thailand and Vietnam, our main competitors, have increased the price of their rice by 10 percent."

Farmers, exporters will be hit

Talking about the disadvantages of this ban, Rajeev Kumar says, "I think it is better for the farmers if the demand for their product is high. When you ban the export, it is obvious that the demand for their product will be less and the farmer will not get lower prices. Secondly, the exporters are directly affected by this decision, it is their livelihood."

'We can lose the market'

Rajeev Kumar said India's rice goes to 165 countries around the world, which is the result of the hard work of rice traders. The demand for Indian rice has increased worldwide, he said..

Kumar said further, "If we look at global trade, India has 42 percent market share. If this ban continues for a long time, we can lose this market. India is a big player in this market and if it leaves the market, it is obvious that the prices will increase worldwide. It's a big challenge for the countries that depend on India's rice."

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