India on Thursday imposed a 20 per cent duty on exports of various grades of rice as the world's biggest exporter of the grain tries to calm local prices, reports Reuters.
The tax would discourage buyers from making purchases from India and prompt them to shift towards rivals Thailand and Vietnam, which have been struggling to increase shipments and raise prices.
The government has excluded parboiled and basmati rice from the export duty, but white and brown rice will draw the duty, which accounts for more than 60 per cent of India's exports, said BV Krishna Rao, president of the All India Rice Exporters Association.
"With this duty, Indian rice shipments will become uncompetitive in the world market. Buyers will shift to Thailand and Vietnam," Rao said.
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India accounts for more than 40 per cent of global rice shipments and competes with Thailand, Vietnam, Pakistan and Myanmar in the world market.
Below-average rainfall in key rice-producing states such as West Bengal, Bihar and Uttar Pradesh has raised concerns over rice production in India which has already banned wheat exports and restricted sugar shipments this year.
Indian exports would fall by at least 25 per cent in the coming months because of the duty, said Himanshu Agarwal, executive director at Satyam Balajee, India's biggest rice exporter.
India's rice exports touched a record 21.5 million tonnes in 2021, more than the combined shipments of the world's next four biggest exporters of the grain: Thailand, Vietnam, Pakistan and the United States.
India exports rice to more than 150 countries and any reduction in its shipments would fuel food inflation.
The grain is a staple for more than 3 billion people, and when India banned exports in 2007, global prices shot to new peaks.
