To ensure food grain availability and increase domestic food security, the Indian government has imposed a 20% export duty on parboiled rice and specific varieties of milled rice. The Ministry of Finance has confirmed that the new regulation will take effect on May 1, 2025, and will apply to rice under both GI-tagged and non-GI customs classifications. This includes semi-milled and wholly milled rice, whether polished or glazed.
Why the Export Duty Was Imposed?
The decision was made due to domestic food concerns and pressures faced by the global supply chain. In October 2023, the government had previously relaxed restrictions, including:
- Removal of the $490 per tonne Minimum Export Price (MEP) on white rice
- Reducing the 10% customs duty on parboiled rice to 0%
As a result, the move reflects the recalibration of rice availability, particularly as a result of the 2025 monsoon season, which is likely to affect agricultural output.
Background: Timeline of India’s Rice Export Policy
Indian rice exports were restricted for the first time in September 2022, starting with a ban on broken rice. This was soon followed by:
- 20% duty on white rice exports
- Lifting some curbs in October 2023
- The export ban on broken rice is still in place
In addition to addressing rising food inflation, these measures ensured that sufficient grain stocks were available for domestic programs.
Impact on Domestic and Global Markets
The newly reinstated 20% export duty is expected to:
- Stabilize rice prices in the domestic market
- Maintain adequate buffer stocks
- Protect government-run food schemes like the Public Distribution System (PDS)
Globally, as India accounts for over 40% of global rice exports, the new duty could:
- Trigger international rice price hikes
- Shift demand to countries like Thailand, Vietnam, and Pakistan
Official Notification – Effective May 1, 2025
The Ministry of Finance has issued an official gazette outlining the new export duty on parboiled and milled rice. The duty applies to:
- Parboiled rice
- Semi-milled or wholly milled rice
- GI and non-GI varieties under “Other Rice”
Long-Term Strategic Outlook
This may cause short-term problems for exporters, but the government views it as a strategic measure that balances export growth with internal food security. The objective is to:
- Mitigate food inflation
- Secure domestic grain availability
- Prepare for unpredictable weather patterns impacting agriculture
Final Note
India remains a dominant player in the global rice trade. However, this policy signals a strong national focus on ensuring domestic needs take precedence over exports.
For updated rice export guidelines or to partner with a trusted rice exporter, contact Shah Enterprises at +91 7982948791 or visit Shah Enterprises.
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