iGrain India - New Delhi. The new government to be formed at the center next month is unlikely to remove the 20 percent export duty imposed on non-basmati Sela rice in the near future because its domestic market price has not fallen as expected.
The government is getting good revenue from the recovery of export duty imposed on Sela rice and it is helping in easing its supply and availability situation in the domestic market.
In fact, despite the imposition of 20 percent export duty, the price of Indian Sela rice is competitive compared to other exporting countries and hence African countries have no other option but to buy it.
The initial objective of the customs duty was to increase the supply and availability of rice in the domestic market and to curb the rise in prices.
Earlier, there were apprehensions that the export of Sela rice would be affected due to this customs duty, but gradually the situation became normal.
Since the Indian government had already banned the commercial export of 100% broken rice and non-basmati white (raw) rice, sella rice became the only option for importing countries.
Now the government is realizing that the 20% export duty on sella rice is generating revenue worth millions of dollars without affecting the domestic market price.
It appears that the export of sella rice will not be banned but the export duty on it will also not be removed in the near future. The new government may try to maintain the status quo.
Although domestic production of rice has been satisfactory overall, the time is not yet considered favorable to make its export duty free or to allow the export of raw rice.