The government on Thursday imposed a 20% export duty on non-basmati ‘white’ rice exports which is expected to hit overall volume of exports in the current fiscal.
According to a finance ministry notification, the export tax will be applicable from Friday.
Exporters say that out of total non-basmati rice exports of 17 million tonne (mt) in 2021-22, share of white rice was around 60% and the rest of the shipments were par-boiled rice which has been exempted from export duty.
“Our concern is whether this export duty will be applicable to around 2 mt white rice consignment in the transit,” V Krishna Rao, president, All India Rice Exporters Association, told FE.
Rao said imposition of export tax will definitely reduce the volume of rice export this fiscal and make rice from India costlier.
Currently, India is exporting non-basmati rice at around $360 a tonne.
The finance ministry also imposed a 20% export duty on rice in husk (paddy)and husked brown rice.
India has been the world’s largest rice exporter in the last decade — export earnings stood at $8.8 billion in 2020-21 and $9.6 billion in 2021-22.
According to the commerce ministry data, India’s value of rice exports rose 12% to $2.6 billion in the first quarter of the current fiscal compared to previous year.
“It will make the exports costlier thereby ensuring affordability of rice to the common masses,” Saurab Agarwal, tax partner, EY said. Because of 5% decline in paddy sowing this kharif season because of deficient rainfall in key paddy growing areas of West Bengall, Uttar Pradesh, Jharkhand and Bihar, rice production is expected to decline 2022-23 crop year (July-June) from a record 130 mt achieved in 2021-22 crop year.
The United States department of agriculture (USDA) in its rice outlook for August had stated that India’s rice exports are projected to increase to a record 22 MT in 2022-23. USDA has projected that country’s projected exports exceed the combined shipments of the next three-largest exporters — Thailand, Vietnam and Pakistan.
Out of the 21 mt of rice shipment in 2021-22, India exported more than 17 mt of non-basmati rice and the rest of the volume was aromatic and long grain Basmati rice. In terms of volume, Bangladesh, China, Benin and Nepal are five major export destinations of rice.