Govt may scrap import duty on rice till Sept 2010

Govt may scrap import duty on rice till Sept 2010

New Delhi: The Centre is believed to have decided to abolish import duty on rice to augment supply in the domestic market, after drought in about half the country stoked fears of a fall in production of the food grain.

Sources said that in a meeting last month, the empowered group of ministers (Egom) on food, headed by finance minister Pranab Mukherjee, recommended that import duty on rice be cut to zero from the current 70% till September 2010.

The government had once earlier (20 March 2008 to 31 March 2009) scrapped the customs duty on rice as part of measures to control inflation. However, the customs duty was restored from 1 April 2009.

The empowered panel also agreed to continue with the ban on export of non-basmati rice, imposed in April last year, sources added. Prior to the ban, India was a major exporter of non-basmati rice along with Thailand and Vietnam. However, the country is currently exporting only basmati rice.

The decisions by the government came after poor monsoon ravaged the most important summer-sown crop—paddy—with area under the crop slumping by nearly 64 lakh hectares, deepening fears that rice output may fall more than what the Centre had anticipated.

Agriculture minister Sharad Pawar had said last month that rice production could decline by 10 million tonnes in view of drought. India produced 84.58 million tonnes in Kharif 2008.