Located in the Asian continent, India is the leading rice exporter in the world. The country exports rice to over 150 countries across the globe and with that shares a mammoth 45 per cent share in the global rice trade. Different varieties of Indian rice remain in high demand all year round and owing to favorable weather conditions, the country exports bulk rice every year.
However, climatic conditions were different last time around. Owing to scanty rainfall and reduced plantation, the Government of India imposed a 20% export duty on all varieties of non-basmati rice except parboiled rice to ensure adequate supplies for domestic consumption. In the aftermath of the decision, rice suppliers and analysts anticipated the exports to decline which in fact is true. However, earnings from rice exports have gone up.
A look at the data reveal that rice exports in February 2023 stood at 1.53 lakh tonnes, down 0.10 lakh tonnes in comparison to February 2022. However, earnings from rice exports stood at $563.88 million against $552.02 million in February last year.
Facts And Figures
According to data, India’s rice exports in the month of February declined by 6 per cent to stand at 1.53 lakh tonnes. However, despite this, non-basmati rice exports during the April 2022-February 2023 period was up approximately 3% to stand at 16.09 million tonnes.
This highlight two important factors to consider. A proper analysis is enough to conclude that:
- The leading rice importers in the global market have absorbed the 20% export duty on all varieties of non-basmati rice except parboiled rice imposed by the Government of India in September 2022
- The strong demand by different global markets for Indian rice despite duty hike is helping India hold on to its spot as a leading rice exporter in the world
Strong Demand For Indian Rice
Despite the duty hike by the Government of India in September 2022, Indian rice continues to witness strong demand in the global markets. According to data, while exports to Bangladesh, Nepal and South-East Asia dropped, during the April 2022-February 2023 period, rice exports to the European Union, the America and the Gulf countries witnessed a rise.
Mr. B.V Krishna Rao, President of The Rice exporters Association (TREA) said, “India will get an additional billion-dollar revenue from the exports by imposing duty. With the country enjoying 45 per cent market share, the global rice market has absorbed the impact of the Indian duty.”
The Bottom Line
Owing to favorable weather conditions, India enjoys bumper rice harvest every year and is able to export bulk rice to 150+ countries around the world. However, last year, scanty rainfall and low plantation pushed the GOI to impose a blanket ban on export of broken rice and 20% export duty on all varieties of non-basmati rice except parboiled rice. Rice exporters of the country believed that the decision would dampen their business prospects and while that led to drop in rice exports in the short-run, data highlight that earnings from rice exports are on the rise.
With domestic supply forecast seem to be ample, the GOI is unlikely to impose additional rice export curbs in the near term and the absorption of 20% tax by leading rice exporters is helping India hold on to its top spot.
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