Kruti Dave, Pune
According to the International Monetary Fund, encouraging India to lift export restrictions on a particular type of rice might impact world inflation. Non-basmati white rice, which makes up around 25% of the nation’s total rice exports, was outlawed by the Indian government on July 20 to increase local supply and control retail prices during the impending holiday season.
During a news conference, Pierre-Olivier Gourinchas, the IMF’s chief economist, stated that these restrictions would likely worsen food price volatility in other parts of the world. In light of their potential for harm on a worldwide scale, he added, “So they are certainly something that we would encourage the removal of these types of export restrictions.”
India exported 4.2 million USD worth of non-basmati white rice in 2022–2023 compared to 2.62 million USD the year before. India exports non-basmati white rice primarily to the US, Thailand, Italy, Spain, and Sri Lanka.
According to a report by the news agency PTI, the food ministry stated in an official statement that the export policy for basmati rice, which makes up the majority of exports, and par-boiled non-basmati rice would not change.
The government immediately modified the export policy from “Free with the export duty of 20%” to “Prohibited”. According to Daniel Leigh, Division Chief of the IMF Research Department, the setting is unquestionably one of reducing inflation globally. He made this statement in an interview with PTI.
“That’s important because it allows monetary policy to open up and prevents interest rates from starting to rise, which creates currency fluctuations. Keeping that trend of food and energy inflation low is something we regard as being in the best interests of the entire world community, said Leigh.
The financial organisation based in Washington, DC, predicted India’s growth rate to be 6.1 per cent for the fiscal year 2024, a modest increase from the estimated projection of 5.9 per cent for the same period in April.