India, the world’s largest rice exporter, has scrapped its export tax on parboiled rice as the country prepares for a bumper crop after a strong monsoon season. The government announced the removal of the duty in an official order on Tuesday, signaling confidence in its upcoming harvest and aiming to stabilize domestic rice prices.

This move follows last month’s reduction of the duty on parboiled rice from 20 percent to 10 percent. The elimination of the export tax is seen as a boost for India’s rice exports, particularly in light of increased stock levels at government warehouses.

The Rice Exporters Association’s president, B.V. Krishna Rao, mentioned that duty-free exports would encourage price-sensitive buyers, especially from Africa, to increase their purchases of parboiled rice from India. The reduction in tax is expected to stimulate demand and reinvigorate the country’s rice trade. 

India’s parboiled rice exports had fallen by 13 percent during the first eight months of 2024, totaling 5.1 million metric tons. This decline was partly due to the export restrictions imposed after the El Nino weather pattern in 2023, which led to concerns over a poor monsoon season and potential rice shortages. The government’s export curbs were implemented to keep domestic prices stable ahead of the April-June 2024 national elections. 

As global demand for rice remains high, India's decision is likely to influence international rice prices.

 

Trade and industry officials speculate that India’s larger rice output could prompt the government to consider removing the $490-per-metric-ton floor price for non-basmati white rice exports. Increased rice shipments from India, along with lower prices, could pressure other major rice-exporting countries like Pakistan, Thailand, and Vietnam to reduce their rates to remain competitive. 

Dev Garg, Vice-president of the Indian Rice Exporters Federation, commented that the removal of the export tax on parboiled rice reflects the government’s growing confidence in the new season’s harvest. The surplus in domestic inventories, bolstered by increased production and steady rainfall, has alleviated concerns about shortages. 

In addition to parboiled rice, the government also removed the 10 percent export duty on husked brown rice and rice paddy. As rice stocks rise, the government’s actions are poised to increase India’s influence in global rice markets, potentially easing international prices and benefiting consumers worldwide.