Govt Considering Extension Of Parboiled Rice Export Tax To Tackle Food Inflation

While there's no immediate plan to prohibit parboiled rice exports, discussions surrounding the extension of the tax, currently set to expire on March 31

The government is weighing the possibility of maintaining the export levy at 20 per cent.

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As India, the leading global rice exporter, gears up for general elections slated for the first half of this year, the central government contemplates extending the export tax on parboiled rice. This measure aims to alleviate food inflation, potentially tightening global rice supply and driving prices to new highs, according to Bloomberg’s report.

Sources privy to the development told the news agency that the government is weighing the possibility of maintaining the export levy at 20 per cent. While there's no immediate plan to prohibit parboiled rice exports, discussions surrounding the extension of the tax, currently set to expire on March 31, remain confidential.

The continuation of the export tax could further escalate benchmark Asian rice prices, which have lingered near a 15-year pinnacle since India commenced restricting sales of crucial varieties in 2023. This development could adversely affect nations in West Africa and the Middle East, heavily reliant on India for their rice staple.

The potential extension of the levy forms part of the government's robust efforts to curb food inflation, which surged to nearly 10 per cent in December compared to the previous year. India has already imposed restrictions on wheat, sugar, and most rice varieties, alongside cracking down on hoarding. Additionally, it has prolonged low import duties on edible oils for another year.

Despite these measures, retail rice prices in Delhi remain approximately 11 per cent higher than the previous year. To address this issue, Food Minister Piyush Goyal unveiled a subsidised rice program on Tuesday, targeting retail customers nationwide. The government is already retailing wheat flour and chickpeas at rates cheaper than the market price.

Parboiled rice, constituting about 30 per cent of India's total exports prior to the restrictions, undergoes a process involving partial boiling of paddy before milling, enhancing its nutritional value and altering the texture of cooked rice. In the 2022-23 period, India held a 40 per cent share in the global rice trade.