New Delhi: India is willing to sell 500,000 tonnes of rice to Indonesia, food minister K.V. Thomas said, but also wants the South East Asian country to cut its export tax on crude palm oil which has threatened the domestic industry.

“My ministry has no objections in exporting 500,000 tonnes rice to Indonesia from government stocks," Thomas said after a meeting with Indonesian officials in New Delhi on Wednesday.

A file photo of food minister KV Thomas

Indonesia wants Indian rice to help top up stock levels this year as its own output struggles to meet growing demand and one of its regular suppliers, Thailand, is trying to cope with the impact of severe flooding and has pushed up prices.

Indonesia, the world’s largest Muslim nation, consumes around 2.7 million tonnes of rice a month and that figure is increasing as its population grows. The government hopes to be self-sufficient again by 2014.

Indonesia’s changes to its tax structure on palm oil exports, announced in August, make refined palm oil more attractive than crude - a move which has provoked sharp criticism from India’s refining industry.

“The sudden rise in export duty on crude palm oil will badly hurt Indian industry, therefore we have sought a reduction," Thomas said.

India’s industry has called on the government to raise import taxes to counter Indonesia’s move but New Delhi has not taken any action so far.

Indonesia could review its taxes along with Malaysia, another leading producer of palm oil, industry and government sources told Reuters on 21 Oct.