The government has decided to relax norms for export of Basmati rice, which is a premium variety of the grain and is not widely consumed in the domestic market.
The minimum export price (MEP) of Basmati rice has been lowered, Finance Secretary Ashok Chawla told reporters here today.
The decision was taken by the Empowered Group of Ministers (EGoM) on food management, headed by Finance Minister Pranab Mukherjee, which met yesterday. The EGoM is also believed to have taken some decisions on offloading wheat and rice in the open market.
While Chawla did not indicate the new MEP for Basmati rice, trade sources said that MEP has been reduced to USD 800 a tonne against the present level of USD 1,100 per tonne. The Commerce Ministry had proposed the threshold of USD 750 a tonne.
Sources said that the ministry was in favour of reducing the MEP in the backdrop of a sharp contraction in country's overall exports. It argued if India continues with higher MEP, it would give edge to rival Pakistan in the global market.
Pakistan, which is the other producing country, is contracting to export Basmati rice at USD 700-800 a tonne, exporters said.
The export of non-basmati rice is banned in India along with wheat in the wake of high food prices. India exported about 1.8 million tonnes of Basmati rice in 2007-08 season.
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