Government Considers Extending Parboiled Rice Export Tax to Address Food Inflation


Published on: February 13, 2024.

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India, the leading global rice exporter, is considering extending the export tax on parboiled rice in an effort to curb food inflation and maintain a stable supply of rice. The export tax, currently set at 20 percent, is under discussion for potential extension beyond its expiration date of March 31.

If the export tax is extended, it could lead to higher benchmark Asian rice prices, which have remained at a 15-year high since India implemented restrictions on the export of crucial rice varieties in 2023. This could have a significant impact on nations in West Africa and the Middle East, which heavily depend on India for their rice staple.

The Indian government has been taking proactive measures to address food inflation, which reached nearly 10 percent in December compared to the previous year. In addition to the export tax on rice, the government has imposed restrictions on wheat, sugar, and most rice varieties, as well as cracking down on hoarding. Import duties on edible oils have also been kept low for another year.

Despite these efforts, retail rice prices in Delhi are still approximately 11 percent higher than the previous year. To alleviate this issue, Food Minister Piyush Goyal has introduced a subsidised rice program targeting retail customers nationwide. The government is already selling wheat flour and chickpeas at discounted rates compared to market prices.

Parboiled rice, which makes up about 30 percent of India’s total rice exports, undergoes a process of partial boiling before milling, which enhances its nutritional value and alters its texture when cooked. India currently holds a 40 percent share in the global rice trade.

In conclusion, the potential extension of the export tax on parboiled rice in India could have significant implications for global rice prices and the countries that rely on India for their rice supply. The Indian government’s efforts to curb food inflation and ensure a stable supply of rice are ongoing, with measures such as subsidized rice programs for retail customers. Despite these efforts, retail rice prices remain high, and the impact of the export tax extension on global rice prices is yet to be seen.

Source: [Source](https://news.abplive.com)