Govt imposes 20% export duty on rice as paddy area shrinks

The government on Thursday imposed a 20 per cent export duty on non-Basmati rice except for parboiled rice to boost domestic supplies amid a fall in area under the paddy crop in the current Kharif season.

According to a notification by the revenue department, an export duty of 20 per cent has been imposed on 'rice in husk (paddy or rough)' and 'husked (brown) rice'.
The Central Board of Indirect Taxes & Customs further said the export of 'semi-milled or wholly-milled rice, whether or not polished or glazed(other than Parboiled rice and Basmati rice)' will also attract a customs duty of 20 per cent.

The export duty will come in force from September 9, the notification added.The area under the paddy crop has been down by 5.62 per cent at 383.99 lakh hectares in the ongoing Kharif season so far due to poor rains in some states, as per the latest data released by the agriculture ministry.

India, the world's second-largest rice producer after China, commands a 40 per cent share in the global trade.

The country exported 21.2 million tonnes of rice in the 2021-22 fiscal year, of which 3.94 million tonnes were Basmati rice. It exported non-Basmati rice worth USD 6.11 billion in the same period, as per official data.

The country exported non-Basmati rice to more than 150 countries in 2021-22.

Welcoming the export duty, former president of All India Rice Exporters Association Vijay Setia said Indian rice was being exported at a "very low price". The export duty would lead to a reduction in non-Basmati rice shipments by 2-3 million tonnes, but the realisation from the exports would remain the same because of the 20 per cent duty.

"It is a good decision in view of fall in paddy acreage," Setia said.

The association's current president Nathi Ram Gupta said the export of raw rice from southern parts of the country would be impacted, but shipments of parboiled may go up.

Paddy is the main Kharif crop, sowing of which begins with the onset of the southwest monsoon in June and harvesting starts from October onwards.

Rice production rose to a record 130.29 million tonnes in the last crop year as against 124.37 million tonnes in 2020-21.

The government has already restricted exports of wheat.