Government Lifts Minimum Export Price on Onion and Basmati Rice to Boost Exports

The government has removed the minimum export price (MEP) for onions and basmati rice to enhance exports and farmers' incomes. This decision comes ahead of assembly elections in Maharashtra and Haryana. The move aims to address high domestic prices and support the agricultural sector amidst increasing production and storage levels.

The government on Friday eliminated the minimum price thresholds for exporting onions and basmati rice, aiming to boost outbound shipments and increase farmers' income.

This significant move, prior to assembly elections in Maharashtra and Haryana, lifts the previously set USD 950 per tonne MEP on basmati rice, according to a Department of Commerce communication.

Commerce and Industry Minister Piyush Goyal asserted that this initiative will stimulate exports and improve farmers' earnings.

'The decision to annul the USD 950 MT minimum export price for issuing Registration-cum-Allocation Certificates (RCAC) for basmati rice exports was finalized,' stated the communication.

The agricultural and processed food products export development authority (APEDA) is mandated to expedite the enactment of this decision and will oversee export contracts to prevent unrealistic pricing.

Notably, the floor price for basmati rice exports had been reduced to USD 950 per tonne in October 2023 from USD 1,200 per tonne, following concerns that elevated prices deterred outward shipments.

In 2023-24, India's basmati rice exports totalled USD 5.9 billion, illustrating a notable increase from the USD 4.8 billion of the previous fiscal year.

Amid these agricultural policy shifts, the government also withdrew the USD 550 per tonne MEP on onions, imposed previously to curb illegal white non-basmati rice exports masquerading as premium basmati rice.

This decision was made despite the persistently high retail prices of onions, reaching an all-India average of Rs 50.83 per kg as reported by the Department of Consumer Affairs.

Simultaneously, the government has also strengthened wheat stock holding limits to combat rising prices and hoarding, effective until March 31, 2025.

(With inputs from agencies.)