The extension will be valid until November 30, 2014.
The government will continue to exempt rice exporters from the stock holding limit, traders said.
India surpassed Thailand and Vietnam to become the leading exporter of rice in 2012, when it sold around 10 million tonne of the grain in the overseas market.
On Friday, Indian common rice varieties were quoted at $390-$420 per tonne free-on-board, while the aromatic basmati variety was quoted at around $1,515 a tonne, traders said.
India produced 104 million tonne rice in 2012-13, enough to cover demand from its around 1.2 billion population.
India has been selling rice in the overseas markets without any curbs for the past three years as a successive bumper harvest swelled stocks. On November 1, its rice stocks stood at 17 million tonne, more than three times the target in the quarter to December.