Implications of India's Non-Basmati Rice Export Ban in 2023

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Tanya Kishore

MBA- II Semester

Batch: 2023-25

tanya.kishore2025@sibmnoida.siu.edu.in







Rice is a staple diet in India, and it is one of the major exported items to the world since India is a major rice-producing country. India accounts for more than 40% of the world’s rice exports and last year exported around 55 million metric tons of rice to 166 countries in the world, out of which almost 40% of rice was exported to the United States of America.

This year, partly because of global warming, an early monsoon and also some depressions in the Bay of Bengal as well as in the Arabian Seas resulted in heavy downpours in Southern, western eastern and northern areas, resulting in massive floods in the different regions in India. These heavy pre-monsoon rains destroyed/ affected the rice production in the country. Sensing the rice production in India might not be sufficient to cater to the needs of the domestic market. Further, being the election year where 3-4 major states are poll-bound and also general elections are around the corner, in such a scenario Government of India did not take any chance, which might have added to the inflation in the domestic rice market. So, the Government of India took a decision to ban the export of non-basmati rice to the world market so that the domestic market wouldn’t get rice scarcity and hoarders or rampant black marketers would not get a chance to exploit the hapless people, who might have added to the inflation in the domestic market.



So, to pre-empt the domestic food security concerns, climate issues affecting the production of rice, and mainly taking care of domestic consumption, for maintaining adequate availability of rice in the Indian market so as to allay the rise in the prices in the domestic market, India banned the export of non-basmati rice.

On the other hand, Ukraine being one of the major grain exporters engaged in a long-drawn war with Russia was also unable to export grains to the world market and even to its neighbouring European countries as Russia put an embargo on grain export from Ukraine by disrupting the Black sea grain trade deal also added to the worsening grain availability scenario in the world, resulting a serious grain specifically rice shortage in the world market and particularly in the US and Canada market which completely depends on rice import mostly from India. The situation reached such an extent that most of the American stores ran short of rice stock, and people resorted to panic buying, which created chaos in the US and Canadian markets, and the grain price index saw a steep rise, adding to the inflation here.

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