India Rice Exports Are Restricted. What Induced This Move?

India Rice Exports Are Restricted. What Induced This Move?

India rice exports are now restricted. The move is contradictory to the statement that was earlier received from officials. The latest update suggests that the country has imposed a ban on rice exports concerning the broken rice variant.

India Rice Exports Restrictions

The Government of India on Thursday imposed a 20% export duty on non-basmati rice. The country that is the world’s largest grain exporter had to take such a decision in order to meet local needs and put a halt on exorbitant price hikes. This is due to the fact that several factors like drought, inflation, and the Russia-Ukraine war had disrupted the supply of grains in the nation. Moreover, the surge in prices added fuel to the situation. In order to mitigate these problems the centre had to take action and it did.

The export duty is aimed at curbing the export of white and brown rice that constitute for 60% the India rice exports. B.V. Krishna Rao, President of the All India Rice Exporters Association, noted that:

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

However, exporters mentioned that they wanted the government to allow some relief on the contracts that have been signed prior to the decision. Himanshu Agarwal, who is the Executive Director at Satyam Balajee, said that:

"Buyers can't pay 20% more than the agreed price and even sellers can't afford to pay the levy. The government should exempt already signed contracts from the levy."

Decision on the above-mentioned request is still pending and it is not known if the government would really listen to them.

Earlier on August 31, 2022, there was an update regarding the same which mentioned that a government official confirmed that they had no plans to put any restrictions on rice exports at that time. They also noted that there are sufficient quantities of buffer stocks that would be enough to meet the requirements in the country. The Indian government had earlier put restrictions on wheat export from the country, which is why there were concerns regarding the same with rice. But now these worries have become a reality due to the latest official statement on the same.

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Nitin Kapur

Nitin Kapur is an entrepreneur, investor, business advisor and speaker. If you wish to know about businesses and their position then there is no better analyst than him to help you with that.

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