India Gains Upper Hand as Basmati Rice Export Price Floor Removed

The Indian government has removed the minimum export price (MEP) on basmati rice, enhancing competitiveness for both farmers and exporters. This move is set to increase paddy prices and offers a level playing field with Pakistan. Export growth and rising demand signal a positive outlook.

The Indian government has eliminated the minimum export price (MEP) on basmati rice ahead of the kharif harvest, a move hailed by industry insiders as beneficial for both farmers and exporters. The removal of this trade barrier is anticipated to boost Indian exporters' competitiveness in global markets.

"The removal of MEP on basmati rice is a pivotal move, expected to significantly benefit both farmers and exporters. For farmers, this change is projected to increase paddy prices by 7-10 per cent, providing them with better income as the price floor that capped export prices is now lifted," said Akshay Gupta, Head of Bulk Exports at KRBL Limited, known for its 'India Gate' brand. Exporters can now offer more flexible pricing, making Indian basmati rice more competitive globally, Gupta told ANI.

India, the world's leading exporter and grower of basmati rice, had exported 5.2 million tonnes worth Rs 48,389.18 crores in 2023-24. Major markets included Saudi Arabia, Iran, Iraq, UAE, the US, and Yemen. Amit Marwaha, CEO of DRRK Foods, echoed that the removal of MEP would make the playing field level with Pakistan, improving market conditions and increasing domestic paddy prices.

Following a fruitful monsoon, production quality is expected to be high. Crisil Ratings noted that the availability of domestic basmati rice and the removal of MEP could enhance exports by 3-4 per cent, while domestic sales are projected to grow 6 per cent due to increased demand from hotels, restaurants, and cafes.

(With inputs from agencies.)