As growth in shipments of India’s prized basmati moderates, the Centre is planning to send a delegation to rice-producing nations of Vietnam, Indonesia and Philippines in the coming months to enhance outbound shipments of the commodity, a senior government official said.
“We want to create a market for long-grain basmati in rice-producing nations such as Vietnam because they may be competitors but their rice is different – small grain rice or sticky rice,” the official told Moneycontrol on condition of anonymity.
The move is also part of India’s efforts to expand the market for the long-grain aromatic rice by creating a taste for the variant in nations that are more used to shorter-grain jasmine or sticky rice.
Rice, basmati and non-basmati, has the major share in India's cereal exports, at 95 percent (in value terms) in 2023-24.
The government in September 2024 scrapped a minimum export price (MEP) of $950 a tonne on exports of basmati rice.
This came after the government reduced the floor price for exports from $1,200 to $950 a tonne in October 2023 amid concerns that higher prices were impacting outbound shipments.
India exported basmati worth $5.9 billion in 2024-25, a growth of only 1.73 percent on-year and significantly lower than the 22.05 percent rise in outbound shipments in FY24.
“The growth in exports of basmati rice has been less in value-terms. Given the export restrictions in place earlier, exporters could not ship to earlier levels and due to the element of competition they reduced prices. Even after removal of restriction, many of them were luring new markets by lowering prices. But now we are seeing some stabilisation in prices and increase in value terms,” the official said.
Exports of basmati to Vietnam, Indonesia, and Philippines stood at only $15.27 million in FY25. The major buyers of this variant are Saudi Arabia, Iran, Iraq, United Arab Emirates, the United States, and the Yemen Republic.
While both Indonesia and Philippines are major rice producers, Vietnam is the world’s third-largest exporter of the grain.
Vietnam is also a major supplier of rice to Indonesia and Philippines, thereby offering India a chance to further diversify its market for the flagship basmati variant.
“We are not looking at displacing other varieties of rice, there is demand for certain variants India offers. We want to develop a taste for Indian basmati even for nations that are major producers of rice,” the official added.
Punjab is the leading producer of basmati in India, accounting for 42.7 percent of the total production, while Haryana ranks second and Uttar Pradesh third.
India is the second-largest producer of rice with a share of around 25 percent globally, the country is the top exporter of the basmati.
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