At ICAI meet, Minister Piyush Goyal tells Americans to “bear with” India’s rice ban

Ritu Jha–

“The ban imposed by the government of India on the export of certain types of rice in July this year is “for the global good to ensure food safety for economically weaker sections of consumers” and also “to prevent traders from hoarding and black marketing rice,” said India’s commerce minister Piyush Goyal, while addressing a group of chartered accountants of ICAI from San Francisco.  Goyal during his Nov.15 visit to the Institute of Chartered Accountants of India (ICAI) San Francisco chapter event urged rice importers based in the US to “bear with” the Indian government’s calculated decision to put curbs on rice exports “for the larger good.”

Mani Krishnan, head of Shastha Foods

Mani Krishnan, who runs Shastha Foods, one of America’s largest rice importers and which supplies the grain to hundreds of retail stores across the country, asked the minister about lifting the ban.

Goyal responded, “The world is currently facing high inflation but India is an outlier. We can’t afford inflation. We’re still a developing country. We want low inflation, and low-interest rates, which are essential ingredients for growth. One reason for the ban is that we could see traders cornering all the grain wherever there were shortages or potential shortages, only to profit once the prices went up. Our approach, whenever we put any ban or restriction, is not to fully ban the products, like for many rice varieties, there’s an export duty.”

He added, “The restrictions are largely to ensure food security in India. The idea is to ensure stable prices for the middle class and poor consumers in India, and for all those countries, particularly the less developed countries or the emerging market developing nations, who are friends of India, we give rice, wheat, whatever grains or any other product that we have with us to make sure that the less developed countries can get it at affordable prices. Otherwise, the traders of these products would jack up prices and the poor would not be able to afford it. It’s a well-thought-out, carefully crafted decision. Please bear with us for this. Maybe it may impact your business a little bit in the short run because it is for global good, not just for India.”

India’s Ministry of Commerce and Industry and the Directorate General of Foreign Trade issued a notification in July this year announcing an amendment in the export policy of non-Basmati rice under the Harmonized System.

The Indian government banned with immediate effect the export of non-basmati, and white (NBW) rice. India, which accounts for nearly 40% of the world’s rice exports, effectively banned the export of broken rice.

The export bans in place for NBW and broken rice together accounted for nearly 45 percent of India’s total rice exports of a total of 22 million tonnes in 2022 (January-December). However, there has been no change in the export policy in place for non-basmati parboiled rice and basmati rice, which together account for the balance of rice exports.

The ban was followed by the imposition of a minimum export price (MEP) of $1,200 a ton for exports of basmati rice. However, this was later reduced to $950 per ton as it hampered sales.

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