Problems of Rice Export from India

India is facing stiff competition in the world markets for export of rice. Besides, there are many domestic problems for rice exporters. If these internal problems are relaxed to the extent possible, the exporters may find easy way to boost rice export and such measures will go a long way to sustain the exports.

Some of the major problems :

• Indian rice is costlier in the international market as compared to other competing countries in the world because of imposing of various taxes on rice exports, such as Purchase Tax (on indirect export), Market Fees, Rural Development Fund, Administrative Charges etc. as per the state Govt. policy. In Pakistan rice meant for exports specially the branded ones, duties are extremely low or duty free
• Lack of proper infrastructural facilities
• The Minimum Support Price (MSP) for paddy is enhanced every year by the govt. of India
• The production cost goes up due to increase in the cost of inputs used for paddy cultivation. That is why when paddy is converted to rice, it becomes costlier making it internationally uncompetitive
• Rice production meant for export purpose is having subsidy in other countries, which reduces the cost of production and thereby reducing the cost of rice. Therefore, the export price of rice of such countries is more competitive in the international markets compared to Indian rice
• Indian rice prices are inelastic due to relatively high cost of production whereas the major rice producing nations have decreased the price to capture the international markets
• Rice mills have not been fully modernized to ensure high milling recovery and reduce the percentage of broken rice
• Lack of proper arrangements for production of sufficient quantity of quality seeds needed for cultivation of rice for export purposes
• The export is also suffering much due to the competition from other exporting countries like Thailand, Vietnam and Pakistan because the cost of production in these competing countries is low as compared to the cost of production in India
• Indian Basmati rice is facing aroma problem, because intensity of aroma in traditional basmati varieties is not so high as it used to be
• Post harvest handling of produce is another important aspect. Generally, farmers are harvesting the crop at different moisture levels and keeping the produce at higher moisture level for a longer period will impair the intensity of aroma
• In absence of genetically pure seed of basmati varieties, a variation in plant height, grain size and maturity of the crop is found. This is one of the major reasons for poor quality of basmati rice