Less paddy planting this Kharif leads to a 20% export duty on non-Basmati rice.
The Centre put a 20% export tax on rice, brown rice, semi-milled rice, and fully milled rice, but not on parboiled rice, on Thursday. This will go into effect on September 9.
A notice from the Revenue Department says that ‘rice in the husk (paddy or rough)’ and ‘husked (brown) rice’ now have an export duty of 20%. Also Read | Rising pesticide residues standards may reduce Basmati rice exports.
Concerns about less paddy planting by farmers this Kharif season because of uneven monsoons in some parts of the country have made inflation fears worse and pushed up retail prices for rice in the past few weeks.
The Central Board of Indirect Taxes and Customs also said that exports of ‘semi-milled or wholly-milled rice, whether or not polished or glazed (other than Parboiled rice and Basmati rice)’ will be charged a 20% customs duty.
The export duty will go into effect on September 9. According to the latest data from the Agriculture Ministry, the area where paddy is grown has dropped by 5.62 percent to 383.99 lakh hectares so far this Kharif season. This is because some states haven’t had enough rain.
India is the second largest producer of rice in the world, after China. It has a 40% share of the global rice trade.
In the 2021-22 fiscal year, the country exported 21.2 million tonnes of rice, of which 3.94 million tonnes were Basmati rice. Official data show that during the same time period, it exported rice that wasn’t Basmati and made $6.11 billion from it. In 2021 and 2022, the country exported non-Basmati rice to more than 150 countries.
Vijay Setia, who used to be president of the All India Rice Exporters Association, said that Indian rice was being exported at a ‘very low price’ and that the export duty was a good thing. Because of the 20% duty, the amount made from exports would stay the same, even though the amount of non-Basmati rice shipped would go down by 2-3 million tonnes.
Mr. Setia said, ‘It is a good decision in light of the drop in rice sowing area this Kharif season.’ The current president of the association, Nathi Ram Gupta, said that the export of raw rice from the south of the country would be affected, but shipments of parboiled rice may go up.
The main crop in Kharif is Paddy, which is planted when the southwest monsoon starts in June and harvest begins in October. In the last crop year, 130.29 million tonnes of rice were grown, which was a record. In 2020-21, only 124.37 million tonnes of rice will be grown.