Government of India has officially removed the floor price (minimum export duty) on Basmati rice exports, a step aimed at enhancing the global export of India's prized Basmati rice. This decision follows ongoing discussions about trade concerns and the stabilization of domestic rice availability.
Initially, in August 2023, a floor price of USD 1,200 per metric ton (MT) was set as a protective measure. This step was taken due to rising domestic rice prices and fears that some exporters might misclassify non-basmati rice as Basmati to circumvent the export ban on non-basmati white rice. As the situation evolved, trade associations and stakeholders raised concerns about the impact of this high floor price on legitimate Basmati exports. In response, the government lowered the floor price to USD 950 per MT in October 2023.
The latest decision to completely eliminate the floor price signals a more flexible and market-driven approach to Basmati rice exports. To ensure transparency and prevent undervaluation of the premium GI-tagged Basmati variety, the Agricultural and Processed Food Products Export Development Authority (APEDA) will monitor export contracts closely. This oversight aims to prevent unrealistic pricing, which could harm both exporters and India's reputation in the global rice market.
This policy shift is expected to provide a major boost to India's Basmati rice exports, making the product more competitive in international markets. The removal of the price floor will likely benefit farmers, exporters, and global consumers of Basmati rice.
