In an attempt to reduce food inflation ahead of the Lok Sabha elections, India, the leading exporter of rice worldwide, may impose an export tax on the parboiled rice. As per a Bloomberg article, the action may maintain global supply scarcity and push prices to unprecedented heights.
According to the source, Prime Minister Narendra Modi, who is standing for reelection in the first half of this year, is thinking of maintaining the 20% export levy. A proposal to prohibit the export of parboiled rice is not yet available. The tax had an expiration date of March 31.
The export of parboiled rice was subject to duties imposed by the government in order to maintain a sufficient supply of the grain locally and control domestic prices.
According to a statement from the Finance Ministry, the export tariff that was imposed on August 25 will be in effect until October 16, 2023.
India has put limitations on all non-basmati rice varieties. About 25% of all rice exported from the nation is non-basmati white rice.
In terms of price, India's total basmati rice exports in 2022–2023 were valued at $4.8 billion, while their volume was 45.6 lakh tonnes. Finance Minister Nirmala Sitharaman stated during her budget speech that the government's efforts to curb price increases, particularly for perishable goods, have caused inflation to drop below the tolerance range. India's retail inflation decreased to 5.5% in the same period of 2023 from an average of 6.8% in April–December 2022. Retail inflation is currently steady and falling between the 2 and 6 percent tolerance band that was announced.
