Explainer: India’s Rice Export Ban

Aug 7

India's ban on non-Basmati white rice exports, triggered by rising domestic prices and global factors, aims to ensure affordable domestic availability. The move impacts global rice prices, potentially leading to food insecurity, affecting countries heavily dependent on Indian rice imports.

On July 20, 2023, the Indian government imposed a ban on the export of non-Basmati white rice to “ensure adequate domestic availability at reasonable prices.” Domestic prices of rice have been steadily increasing — by 11.5% over the past year and 3% over the past month — according to a statement by the Ministry of Consumer Affairs, Food, and Public Distribution.

India is currently the world’s largest rice exporter, accounting for more than 40% of global rice shipments. 25% of those exports are of non-Basmati white rice. In 2022, rice shipments from India were recorded at 22.2 million tons. Heavy rains in northern India have inundated rice paddy fields, destroying newly planted seedlings that farmers can only replant once the water recedes from the fields, causing a shortage in rice production.

Why has India enacted a ban on rice exports?

The government cited domestic and international reasons for imposing the ban, rising international prices owing to geopolitical events, changes in El Nino weather patterns, and “extreme climate conditions” in other rice-producing countries.

In September 2022, India imposed a 20% export duty on non-Basmati white rice to ensure domestic availability of the crop. Despite the additional export duty, exports of non-Basmati white rice increased by 33%. Therefore, to keep prices affordable in the domestic market, India has imposed a ban on non-Basmati white rice.

India has explicitly stated that only the export of non-Basmati white rice is being halted. Exports of Basmati rice and par-boiled rice will continue.

What does this entail?

According to researchers, India’s rice ban will likely lead to higher global prices and food insecurity.

Several countries in Asia and Sub-Saharan Africa rely on rice imported from India, making them most vulnerable to the export ban. India exports rice to more than 140 countries, with 42 countries getting more than 50% of their total rice imports from India. While countries like Thailand, Vietnam, and Pakistan are also major rice producers, they cannot fully compensate for the absence of Indian rice in the global market.

The price of 5% broken parboiled rice in India, Thailand, and Vietnam has also shot up. Additionally, Russia’s war in Ukraine and the decision to pull out of the Black Sea Grain Initiative have added to current and future concerns about global food insecurity. The Initiative allowed the resumption of Ukrainian grain and edible oil exports to global markets.

How does this affect the average consumer?

The price of white rice per metric ton in the U.S. has jumped from USD $330 at the beginning of Sept. 2022 to $455 as of July 19, 2023.

This isn’t the first time India has imposed a ban on rice exports; in response to previous global food shortages and soaring prices, India implemented similar bans in 2007-2008 and 2010-2011.

Does President Biden have anything to do with this?

Some Americans have tweeted their frustration at the price hike in grocery items, comparing it to lower prices during Donald Trump’s presidency. While it is true that the price of rice is significantly higher at the moment than it was while Trump was president, the ban's enforcement is not directly related to President Biden's policies.

The ban's primary objective is to safeguard India's domestic markets. The ban's impact stretches beyond the U.S., affecting numerous nations heavily reliant on Indian rice exports.

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