India removes export tax on parboiled rice, anticipates bumper harvest

New Delhi: India, the world’s largest rice exporter, announced the removal of its export tax on parboiled rice on October 22, 2024. This move aimed at boosting exports amid strong domestic supplies following an abundant monsoon season. 

According to reports, the government’s decision comes after an earlier reduction of the tax from 20 percent  to 10 percent last month. Additionally, India recently resumed exports of non-basmati white rice with a minimum export price of 490 dollars per metric ton, marking a broader push to enhance the country’s rice trade.

India’s Rice Export Influence Global Prices

India’s increased rice exports are expected to expand global supplies, which could ease international prices. According to trade officials, the shift may also place pressure on other key rice exporters such as Pakistan, Thailand, and Vietnam to lower their rates to stay competitive. Dev Garg, Vice-President of the Indian Rice Exporters Association, noted that the government’s confidence in removing the tax likely stems from expectations of a bumper crop this season, bolstered by favourable weather conditions.

Tax-Free Parboiled Rice Set to Boost Indian Exports to Price-Sensitive African Markets

The move is particularly significant for price-sensitive markets in Africa. B.V. Krishna Rao, President of the Rice Exporters' Association, highlighted that African buyers are now likely to increase their imports from India, as duty-free parboiled rice becomes an affordable option. He emphasised that Indian rice, already known for its competitive pricing, will likely capture a larger share of the African market as a result.

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Overall, India’s decision to lift the export tax on parboiled rice underscores its position in the global rice trade, ensuring stability in supply and prices for international markets, while further strengthening India's role as a key rice supplier amidst a productive harvest season.