India on Friday reduced export duty on parboiled rice to 10% from 20% earlier, the government said in a notification, as inventories in the world's biggest exporter of the grain surged and farmers are set to harvest a new crop in the coming weeks.
The reduction in export duty will lower India's export prices, boost shipments, and force competing countries like Thailand, Vietnam, Pakistan, and Myanmar to reduce their prices as well.
India had imposed a 20% duty on parboiled rice exports in 2023 after its crop was affected by below-normal rainfall.
The government also reduced the export duty on brown rice and husked rice to 10%, the notification said. This reduction will take effect immediately.
The export duty on white rice has been reduced to zero, but the government did not clarify whether private traders would be allowed to export or if the trade would be restricted to government-to-government deals.
Earlier this month, the government removed a floor price for basmati rice exports to help thousands of farmers who complained about a lack of access to lucrative overseas markets such as Europe, the Middle East and the United States.
Rice stocks at the Food Corporation of India on Sept. 1 stood at 32.3 million metric tons, 38.6% higher than last year, giving the government plenty of elbow room to relax rice export curbs.
Buoyed by copious monsoon rains, farmers have planted rice on 41.35 million hectares, up from 40.45 million hectares last year and 40.1 million hectares of the past five years of the average area under the staple.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
