India Cuts Basmati Export Taxes
Jan. 21 – India, the world’s second-largest rice producer cut export taxes and reduced the minimum export price of basmati rice in order to boost commodity exports and protect farmers. Commerce and Industry minister Kamal Nath announced on Tuesday that the US$162 a ton tax on exports of basmati rice would be slashed. Minimum export prices of the commodity will also reduce from US$1,200 a ton to US$1,100 a ton. The changes come during a expectations of a bumper harvest.
Basmati exports fell by 12 percent to 760,000 tons in the first 10 months of the fiscal year. The move to cut taxes and prices comes after lobbying from beleaguered Basmati exporters who currently owe around US$1-1.2 billion to paddy farmers. The move is expected to boost sagging Indian Basmati sales worldwide compared to Pakistani Basmati and restore the brand value in the short and long term, the Economic Times said.
Basmati is a long grained flavor packed rice is grown largely in India and Pakistan. The two countries are currently in the process of negotiating joint registration of basmati under the Geographical Indications for protecting intellectual property rights, which command a huge premium in global market.