Centre cuts export tax on parboiled rice to nil to boost exports

Tuesday's decision to remove the tax follows last month's move to reduce the duty to 10 percent from 20 percent to boost exports.

The Centre on October 22 announced the reduction of export tax on parboiled rice to zero from the current 10 percent, a government notification said.

The move comes as inventories in the world's biggest exporter of the grain surged and the country is set to produce a bumper crop after copious monsoon rains.

Tuesday's decision to remove the tax follows last month's move to reduce the duty to 10 percent from 20 percent to boost exports.

In September, the government also gave the go ahead for exports of non-basmati white rice to resume. But New Delhi set a floor price for non-basmati white rice exports at $490 a metric ton.

Bigger rice shipments from India would beef up overall global supplies and soften international prices by forcing other major exporters – such as Pakistan, Thailand and Vietnam – to reduce their rates, trade and industry officials said.

The decision to remove the export tax on parboiled rice signals the government's confidence about the new season crop, said Dev Garg, vice-president of the Indian Rice Exporters Association.

Duty-free exports of parboiled rice would encourage price-sensitive African buyers to step up purchases from India, said B.V. Krishna Rao, president of the Rice Exporters' Association.

India also scrapped the 10 percent export duty on husked brown rice and rice paddy, the order said.

With inputs from Reuters