Rice exporters want Centre to obtain duty cuts at RCEP

Indian exporters also face non-tariff barriers from countries such as Indonesia and Malaysia

India’s non-basmati rice exporters want the government to bargain hard in the ongoing RCEP negotiations, seeking duty cuts from ASEAN nations, the second largest market for the cereal. Though India is the largest exporter of rice, it does not have any say in the South East Asian region, where four of the top five markets are located.

Out of bounds

“We would like the government to press for duty cuts on rice exports in the RCEP talks,” said BV Krishna Rao, President of the Rice Exporters Association. In fact, India competes with major Asian rice producers such as Thailand, Vietnam and Myanmar in markets such as Africa, but it is finding it difficult to get a foothold in the South East Asian market.

Africa is the biggest market for rice, estimated at around 15 million tonnes annually, where India has a share of over 50 per cent. South East Asia is the second largest market, with an estimated size of around 8-10 mt annually. “Lack of market access, non-tariff barriers and higher duty imposed by Asean members on Indian rice has forced exporters to concentrate on the African market,” Rao said.

The ASEAN countries impose a duty of 50 per cent on the Indian rice. However the duty imposed on rice produced by member countries is 35 per cent. “There is a duty difference of 15 per cent on the Indian rice. If negotiated well at the RCEP, it could open new markets for us,” Rao said.

Non-tariff barriers

Besides, the Indian exporters also face non-tariff barriers from countries such as Indonesia and Malaysia, from whom we import bulk of the edible oils. Indonesia, for example, specifies a short delivery period of five days for tenders, which works in favour of neighbouring producers such as Thailand and Vietnam, but not for Indian exporters.

“It is difficult to participate in such tenders considering the logistical issues,” Rao said. Similarly, Malaysia prefers to import from Pakistan due to religious connections, he said.

While India exports rice to over 170 countries, it is finding it difficult to crack the markets in China, Indonesia, Malaysia and the Philippines. India is the largest exporter of rice and accounts for a fourth of the global shipments. In 2018-19, non-basmati rice exports fell to 7.5 million tonnes from 8.8 million tonnes the previous year.

Source; BL