Government of India removes floor price on Basmati Rice exports

In a significant move to enhance the export of Basmati rice, a premier Geographical Indication (GI) variety of India, the Government of India has announced the removal of the floor price on Basmati rice exports. This decision comes in response to ongoing trade concerns and the adequate domestic availability of rice.

The Agricultural and Processed Food Products Export Development Authority (APEDA) will monitor export contracts to prevent any unrealistic pricing of Basmati rice and to ensure transparency in export practices. This step aims to strengthen India’s position in the global market while maintaining the integrity of Basmati rice exports.

Background

In August 2023, the government had introduced a floor price of $1,200 per metric ton (MT) for Basmati rice exports. This was a temporary measure taken in response to rising domestic rice prices due to a tight supply situation and to prevent the misclassification of non-Basmati rice as Basmati rice, particularly in light of the export prohibition on Non-Basmati White rice.

Subsequently, in October 2023, following representations from trade bodies and stakeholders, the government rationalized the floor price to $950 per MT. The complete removal of the floor price now signifies a progressive step towards enhancing the competitiveness of Indian Basmati rice in the international market.

This move reflects the government's commitment to supporting the agricultural export sector while ensuring the availability and proper classification of Basmati rice.