India slices export duty on parboiled rice to 10% from 20%

India has slashed the export duty on parboiled rice to 10% from 20%, effective immediately, the country's Ministry of Finance (Department of Revenue) said in a notification released Sept. 27.

The move is likely to boost rice exports and raise prices in India's domestic rice market.

To rein in food inflation, the government in July 2023 banned the export of broken rice, imposed additional duties on non-basmati white rice outflows, and in August 2023 imposed a 20% duty on shipments of parboiled rice.

The notification also said there would be no duty on "semi-milled or wholly milled rice, whether or not polished or glazed (other than parboiled rice and Basmati rice)," which indicates where there would be no longer any export duty on white rice. Currently, the export of white rice is only allowed through the National Cooperative Exports Ltd., an Indian government arm.

There was no mention of releasing the white rice exports ban in the notification.

Market sources anticipate the reduction of export duty to be a boon for the market, especially for domestic suppliers with long positions, as local milled rice prices are likely to increase.

A source noted that local parboiled milled rice is likely to rise by Rupee 1,000/metric ton, or $11.95/t, the next day.

India is forecast to export 20.5 MMt of rice in the marketing year that begins next month and ends September 2025, up 32% from the previous marketing year, Commodity Insights data showed.