WASHINGTON: The International Monetary Fund has said it would “encourage” India to remove restrictions on export of a certain category of rice, which, it said, would have an impact on global inflation.
The Indian government on July 20 had banned the export of non-basmati white rice to boost domestic supply and keep retail prices under check during the upcoming festive season. This type of rice constitutes about 25 per cent of total rice exported from the country.
There would be no change in export policy of par-boiled non-basmati rice and basmati rice, which forms the bulk of exports, the food ministry had said in a statement.
In the current environment, these types of restrictions are likely to exacerbate volatility on food prices in the rest of the world. They can also lead to retaliatory measures, Pierre-Olivier Gourinchas, Chief Economist, International Monetary Fund (IMF), told a press conference here.
“So, they are certainly something that we would encourage the removal of these types of export restrictions, because they can be harmful globally,” he said in response to a question.
The total exports of non-basmati white rice from India was USD 4.2 million in 2022-23 as against USD 2.62 million in the preceding year. Major destinations of India’s non-basmati white rice exports include the US, Thailand, Italy, Spain and Sri Lanka.
In order to ensure adequate availability of non-basmati white rice in the domestic market and to allay the rise in local prices, the government has amended the export policy from ‘Free with export duty of 20%’ to ‘Prohibited’ with immediate effect.
The IMF in its latest economic update released here on Tuesday projected India’s growth rate to be 6.1 per cent for fiscal year 2024, which is slightly up from 5.9 per cent estimated projection for the same period in April.