India’s Export Ban on Non-basmati Rice

The World Trade Organisation (WTO) members, including the US, Canada, Australia, and Japan, have recently questioned the export ban of non-basmati white rice by India.

India’s Export Ban on Non-basmati Rice:

• India accounts for 40% of world rice exports.
• It sells the staple to more than 150 countries, including few poor and vulnerable countries of the Africa and Asia.
• India had exported 22.2 million tons of rice in 2022.
• After a ban on non-basmati white rice exports, India has imposed a 20% tax on parboiled rice shipments, rice in husk (paddy or rough), husked (brown rice), and semi-milled or wholly-milled rice.
• It has also introduced a floor price for overseas sales of basmati rice, to limit the local prices.
• India’s rice export curbs have put upward pressure on global rice prices.

Global queries for rice export ban:

• The importing countries like U.S., United Kingdom, European Union, Canada, Ukraine, and Japan have asked India to ensure that these export restrictions are in line with the General Agreement on Tariff and Trade (GATT) rules.

About General Agreement on Tariff and Trade (GATT) rules:

• GATT is a legal agreement between countries to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas.
• It was signed in Geneva in 1947 and provisionally applied from 1948.
• In 1995, the World Trade Organization (WTO) was established after the Marrakesh agreement in 1994.
• Thus, WTO is the successor to the GATT, and the original GATT text is in effect under the WTOframework.
  • India has been a WTO member since 1995.
• WTO has 164 member states, representing over 98% of global trade and global GDP.

Decision-making at WTO:

• The WTO is a member-driven, rules-based organization and decisions are made collectively through negotiations among members.
• While voting is allowed under the WTO Agreement, decision-making primarily relies on consensus.

Rice and Wheat Production in India:

• Rice production increased from 2020-21 to 2022-23.
• India produces 134 million tonnes of rice and stocks 36 million tonnes for 2023-2024.
• Wheat production initially decreased from 2020-21 to 2021-22 but again rose in 2022-23.
• Despite increased harvests, “supply-side” measures were introduced, including export limitations and trade restrictions on these vital grains.
  • Thus, banning export of wheat, rice, and broken rice.

Why is the export of non-basmati rice in India banned?

• To ensure adequate availability of non-basmati white rice in the Indian market.
• To control the rise in prices in the domestic market.

About the Committee on Agriculture (CoA):

• CoA oversees the implementation of the agreement on Agriculture.
• It provides a forum for members to raise and address related questions and concerns.
• It is responsible for monitoring whether WTO members are complying with their commitments.
• It usually meets three or four times a year.

Ref: Source