Introduction

Rice is one of the important cereal food crop of India. Rice contributes about 43% of total
food grain production and 46% of total cereal production in the country. It continues to play vital
role in the national exports. The percentage share of rice in total national export was 4.5% during
1998-99. The percentage share of agriculture export in total national export was 18.25, whereas
the percentage share of rice export in total agriculture export was 24.62 during 1998-99. Thus,
rice export contributes nearly 25% of total agriculture export from the country.
Rice is also an important cereal food crops in South East Asia. Thailand, Vietnam,
Mynammar, China and Japan are the important countries besides India growing rice. Among the
exporting countries Thailand, Vietnam, India and Pakistan are the important countries exporting
rice in sizeable quantity. Thailand ranks first in the export of rice in the world followed by
Vietnam and India. However, India is likely set to be second largest rice exporter in the world
during the current financial year. China and Indonesia are likely to boost their import of rice,
which will facilitate to India to increase its rice export. Besides, the Govt. of India has also fixed
high target of export of rice from India including broken rice. The Govt. of India has also fixed
the export price of rice quite competitive in the international market. These measures are
expected to contribute in boosting the export of rice from India.
The Govt. has also created four zones in addition to earlier 28 zones to boost the export of
agriculture products from the country, these new zones are -
Apple zone in Himachal Pradesh
Mango zones in Andhra Pradesh
Flower zone in Tamil Nadu
Basmati rice export zone in Punjab.
With the creation of these four new zones the export of agriculture products from the
country have risen to 32 zones, which will cover the export of various agriculture products in the
country. Therefore, the special emphasis is being laid down to strengthen these zones for
increasing agricultural products including export of basmati rice from India. The basmati export
zone has been set up in Punjab to tap the potential of basmati rice to increase its export in the
international market. In fact Indian basmati rice is well recognized in the international markets
because of its quality. Keeping in view the export potential of basmati rice, the Govt. of India has
launched aggressive export promotion policy to further develop the basmati rice by adoption of
improved production technology including improved high yielding new seeds. The scheme for
export of basmati zone will cover Gurdaspur, Amritsar, Kapurthala, Jalandhar, Hoshiarpur and
Nawanshahar districts of Punjab.
RICE EXPORT SCENARIO
India is one of the important countries in the world in export of rice. India's exports are
expected to go up further during current financial year. Hence, Indian rice exports are set to
reach second place in the world markets after Thailand edging out Vietnam in the process as per
the report of the Food and Agricultural Organisation.

Basmati Rice Background
Rice export from India constitutes the major share of Basmati rice. Nearly two-third of
Basmati rice produced in India is exported. Basmati rice is the leading aromatic fine quality rice
of the world trade and it fetches good export price in the international markets. Infact, Basmati
rice is a gift from "Mother Nature" to the Indian sub-continent and grows in the Indo-Gangatic
plains only.
The meaning of Basmati can be derived from "bas" which means aroma and "mati"
meaning sense. Thus the word Basmati implies 'ingrained aroma'. So it is the aroma that gives
basmati its novel characteristics unmatched by any other rice grain anywhere else in the world.
Many scented varieties of rice have been cultivated in the Indian sub- continent from time
immemorial but basmati distinguishes itself from all other aromatic rice due to its unique
aromatic characteristics coupled with silky texture of its long grain. The great Punjabi poet Varis
Shah has described basmati-scented rice in his poem of Heer and Ranjha in 1766. The other
poets such as Mushkin and Sukhdas have also traced back to Abul-4 Fazl Allami's Ain-e-Akbari
about scented grain.
Thus, it is quite evident that basmati rice perhaps from its very accurence has been recipe
entertainer of the Royal Society. Now, it is still considered "dream of the masses" and "charm of
the classes".
The supremacy of basmati rice can not superceded by any other scented variety because of
its unique characteristics viz superfine kernels, exquisite aroma, sweet taste, silky texture,
delicate curvature and linear kernel elongation with least breadth and swelling on cooking.
Because of its quality characteristics, basmati rice is fetching higher price in the international
market. Hence, basmati rice can be equated with "champagne" among wines and 'scotch' among
whiskies.
During pre-partition times, basmati rice was grown in India only but after partition, its heritage is
shared between India and Pakistan. Presently, major growing states of basmati rice in India are
Haryana, Punjab, Western U. P. and Uttranchal.
Basmati rice being novel product is characterized by its unique grain size, aroma and
cooking qualities. Being high value product, it has got good export demand. Hence, the export
has been very high and exports have been steadily growing. The export of basmati rice during
1991-92 was 2.66 lakh mts, a quantum jump of 96.6% at 5.23 lakh mts in 1996-97. During the
year 2000-01, basmati rice export touched an all time high record figure of 8.52 lakh mts
(provisional) showing on increase of 62.9% over 1996-97. During 2001-02 basmati rice export
was 6.66 lakh mts. (Provisional) showing downwards trend compared to previous year's export
of 8.52 lakh mts (provisional), but the export of non-basmati rice registered an increase of
124.6% during 2001-02 over 2000-01.
Global Scenario
(A) Basmati Rice
Gulf region remains the major markets for Indian basmati rice and inside Gulf, Saudi
Arabia accounts for the major chunk of basmati imports from India. Pakistan is the sole
competitor for India in the international market for basmati rice. During 1998-99, 1999-2000 and
2000-01, total quantities of basmati rice exports from India were 5.98 lakh mts., 6.38 lakh mts.
and 8.52 lakh mts. in which the percentage share of Asia was 85.69%, 82.12% and 73.38%
respectively. The percentage share of Asia has decreased for basmati rice, during 1998-99, 1999-
2000 and 2000-01 but the export to Europe has increased in linear order from 11.41% in 1998-99
to 14.37% in 1999-2000 and 20.46% during 2000-01 respectively.
The export to North America has also increased in the same order from 1.39% during
1998-99 to 5.28% during 2000-01. However the export to other countries remains constant with
slight fluctuation from year to year. India's major markets for basmati rice exports have been
Saudi Arabia, Australia, Austria, Belgium, Bahrain, France, Germany, U.K., Denmark, U.S.A.,
Canada, Belgium , Kuwait, Italy, Oman, Yemen, Netherlands, Jordan, Indonesia etc. Infact,
Saudi Arabia traditionally has been the largest market for Indian basmati rice.
The export of Basmati rice from India's during 1998-99 to 2000-01 to different continents
is given in Table 1.

COUNTRY-WISE EXPORT OF RICE FROM INDIA
Rice is exported from India to many countries in the world. Infact, India is facing stiff
competition in the international markets for the export of rice. Thailand is the world's largest rice
exporting country. Vietnam is another large exporter of rice, but currently the demand for
Vietnamese rice has steeply declined in the international market due to which India is likely to
become world's second largest exporter of rice.
Thailand, India and U.S.A. are the only countries making parboiled rice and exporting it.
Thailand, Vietnam and India are also exporting 100% broken rice. Data in respect of parboiled
and broken rice exports separately from India are not available. Hence, export of rice from India
has been divided in to two category i.e., basmati rice and non-basmati rice and the same are
discussed in this chapter.

Basmati Rice
The leading aromatic fine quality rices in world trade popularly known as Basmati rice is
fetching good export price in the international markets for its three district quality features viz.-
pleasant aroma, superfine grains and extreme grain elongation. About two third of basmati rice
produced in India is exported. Basmati rice is exported to various countries in the world from
India. The exports of basmati rice during 1998-99 to 2000-2001 are discussed below :-
During 1998-99 Saudi Arabia was the major importer of basmati rice from India followed
by U.K., Kuwait and U.A.E. and percentage shares of these countries of total exports from India
were 74.11%, 7.66%, 5.25% and 3.34% respectively. Thus, more than 90 per cent quantity of
basmati rice was exported to Saudi Arabia, U.K., Kuwait and UAE during 1998-99 and
remaining quantity was exported to other countries in the world. A total quantity of 5,97,756 mts
of basmati rice was exported from India during 1998-99.
During 1999-2000, these four countries remained as major basmati rice importers from
India and their percentage shares of total quantity of basmati rice exported from India was 62.14
per cent, 8.32 per cent, 7.42 per cent and 5.06 per cent respectively. The export to Saudi Arabia
declined during 1999-2000 as compared to previous year. Infact, the export to U.K., Kuwait,
UAE and U.S.A. increased as compared to 1998-99. The percentage share of four countries
comprising of Saudi Arab, U.K., Kuwait and U.A.E. were 82.94 per cent of total quantity of
basmati rice exported from India during 1999-2000 as against 90.36 per cent during 1998-99.
The export of basmati rice almost remained the same as it was during 1998-99 with slight
fluctuation. A total quantity of 6,38,380 mts of basmati rice was exported from India during
1999-2000, which was 6.80 per cent higher than the export of previous year.
The export of basmati rice to Saudi Arabia increased to 4,78,124 mts during 2000-01 as
against 3,96,676 mts in the previous year. The percentage share of Saudi Arabia of total quantity
of basmati rice exported from India during 2000-01 was 56.14 per cent as against 62.14 per cent
in the previous year. Infact, total quantity exported to Saudi Arabia increased during 2000-01,
but the percentage share of Saudi Arab of total quantity exported from India decreased due to
increase in the percentage share of other importing countries. Other major importing countries of
basmati rice from India were U.K., U.A.E., Kuwait and U.S.A. during 2000-01.
The export to U.K. during 2000-01 was 1,11,984 mts, which was 110.96 per cent higher
than previous year and the percentage share of U.K. of total quantity of basmati rice exported
from India during 2000-01 was 13.15 per cent as against 8.32 per cent in the previous year.
Similarly the export to Kuwait and U.S.A. also increased from 47,338 mts and 16,036 mts during
1999-2000 to 82,800 mts and 35,840 mts during 2000-01 respectively. However, the export to
U.A.E. declined to 30,151 mts during 2000-01 as against 32,297 mts during previous year. A
total quantity of 8,51,722 mts of basmati rice was exported from India during 2000-01, which
was 33.42 per cent higher than the export of previous year. Country-wise export of basmati rice
from India during 1998-99 to 2000-01 is given in Table.5.

AVERAGE EXPORT PRICE
Data on exact export price of rice is not readily available in this Directorate. However, the
average export price per quintal of rice has been worked out year wise for the basmati and non-
basmati rice separately. For the purpose of calculation, total quantity of rice exported and its
value realized in rupees have been taken separately for basmati and non-basmati rice and then
the value of export divided by the quantity of rice exported to arrive at the average export price
of rice per quintal year wise for basmati & non-basmati. Average export price thus worked out
has been discussed in this chapter. Average export price of basmati and non-basmati rice during
1992-93 to 2001-02 are given in Table-7.

Basmati Rice
It is seen from the average export price data given in Table-7 that the export price of
Basmati Rice has fluctuated significantly year after year. During 1992-93, average export price
of basmati rice was Rs. 2,465 per quintal, which declined continuously year after year up to
1996-97 as compared to 1992-93. Average export price for basmati rice has been worked out to
Rs. 2,013 per quintal during 1993-94 and the same has decreased to Rs. 1,957 per quintal during
1994-95. Average export price again increased to Rs. 2,297 per quintal during 1995-96 over
previous year price and increasing trend in average export price continued up to 1998-99.
During 1996-97, average export price has been worked out to Rs. 2,385 per quintal, which
increased to Rs. 2,841 and Rs. 3,140 per quintal during 1997-98 and 1998-99 respectively.
However, average export price of Basmati rice declined during the following three years as
compared to 1998-99 average export price. During 1999-2000, average export price was worked
to Rs. 2,789 per quintal, which came down to Rs. 2,543 per quintal during 2000-01 and it again
went up to Rs. 2,762 per quintal during 2001-02.
The reason for fluctuation in average export price of Basmati rice is attributed to different
quality and quantity of rice exported to different countries during different years. A particular
country may import one year a particular quality/grade of rice and the same country may import
another quality/grade of rice during next or subsequent years. Thus, different quality and
quantity of rice exported to different countries at different export price rate may probably be the
reason for fluctuation of average export price of Basmati rice.


PROBLEMS OF RICE EXPORT FROM INDIA
India is facing stiff competition in the world markets for export of rice. Besides, there are
many domestic problems for rice exporters. If these internal problems are relaxed to the extent
possible, the exporters may find easy way to boost rice export and such measures will go a long
way to sustain the exports. Some of the major problems are discussed in this chapter below: -
1. As per the state Govt. policy, various taxes are imposed on rice exports, such as the states
are imposing Purchase Tax (on indirect export), Market Fees, Rural Development Fund,
Administrative Charges etc. These taxes are rendering the pricing of rice internationally
in competitive. Thus, Indian rice becomes costlier in the international market as
compared to other competing countries in the world and Indian rice exports get setback
many times. Infact, in Pakistan rice meant for exports specially the branded ones, duties
are extremely low or duty free.
2. There is lack of proper infrastructural facilities. Many times exporters, when they carry
their stock to sea port and if the stock is not loaded due to some reason or the other,
exporters do not find godown or proper place to store their stocks properly and safely at
sea port, exporters have to face lot of difficulties, besides, it adds additional expenditure
to the exporters.
3. Due to increase in the cost of inputs used for paddy cultivation the production cost goes
up and the Minimum Support Price (MSP) for paddy is enhanced every year by the
govt. of India to safeguard the interest of the growers. When paddy is converted to rice, it
becomes costlier and thus makes it internationally uncompetitive.
4. Rice production meant for export purpose is having subsidy in other countries, which
reduces the cost of production and thereby reducing the cost of rice. Therefore, the export
price of rice of such countries is more competitive in the international markets compared
to Indian rice.
5. The major rice producing nations have decreased the price to capture the international
markets but Indian rice prices are inelastic due to relatively high cost of production and
becomes uncompetitive in the international markets. Much of basmati rice export
prospects have been lost in the recent part to other competing countries like Pakistan etc
because of high prices.
6. Rice mills have not been fully modernized to ensure high milling recovery and reduce the
percentage of broken rice. The conventional rice mills are having Rubber Roll Sheller in
which percentage of broken rice is more than the modern rice mills that are having under
Runner Sheller. Hence, head rice obtained from milling of conventional mills becomes
costly due to recovery of higher percentage of broken rice. Therefore, conventional mills
are required to be modernized to get recovery of higher percentage of head rice suitable
for export.
7. Lack of proper arrangements for production of sufficient quantity of quality seeds needed
for cultivation of rice for export purposes.
8. The export is also suffering much due to the competition from other exporting countries
like Thailand, Vietnam and Pakistan because the cost of production in these competing
countries is low as compared to the cost of production in India. Infact, trade segment
believes that Indian rice can face the global competition if subsidy is provided.
9. In these days basmati rice is facing aroma problem, because intensity of aroma in
traditional basmati varieties is not so high as it used to be. Infact, basmati varieties are
highly prone to lodging and lodging affects the natural grain development. In such
situation both aroma and linear kernel elongation are affected.
10. Post harvest handling of produce is another important aspect. Generally, farmers are
harvesting the crop at different moisture levels and keeping the produce at higher
moisture level for a longer period will impair the intensity of aroma.
11. In absence of genetically pure seed of basmati varieties, in majority of basmati rice fields,
a variation in plant height, grain size and maturity of the crop is found. This is one of the
major reasons for poor quality of basmati rice. Infact, at the time of rice processing the
grain size can be taken care of, but it is a waste. However, using good quality seed the
loss can be converted into profit.

PROSPECTS OF RICE EXPORT FROM INDIA
As mentioned in the previous chapter that rice is exported from India to many countries in
the world. India is facing stiff competition in the International markets from Thailand, Vietnam,
U.S.A. and Pakistan. There was a considerable growth in the export of rice from India during the
recent past, particularly in the case of non-basmati rice. There are several factors responsible for
this growth. Infact exports depend not only on our ability to sell, but also on the willingness of
importers to buy. Some times major markets/importers used to cut down their import due to their
internal economic problems or good crop harvest and trade also cut down inventories and people
reduce spending. All these measures reduce imports during that particular year. The prospects of
export of basmati and non-basmati rice from India are discussed herewith :

Basmati Rice
Awareness about basmati rice is spreading among different strata of the society in the
country and abroad. Basmati rice is possessing unique grain, cooking, eating and digestive
qualities. Hence, majority of people in the country and abroad have developed liking for basmati
rice. Because of its superfine quality, basmati rice is most preferred and also meant for high
premium value in the national and international markets. Thus, basmati rice is also stated to be
'Pearl' of rice.
There are other sources of aromatic short grain varieties with similar starch content
characteristics, grown different states of the country. Katarni rice is grown in Bihar,
Randhunipagal and Bhadshahbhog are grown in West Bengal, each one of these varieties is
fetching higher price in the local markets. These varieties are having localized preference and
their demand preference could not spread widely elsewhere. Even some of these are possessing
more aroma than the typical basmati varieties. Infact, the harmonious combination of various
factors deciding the appearance, taste, keeping quality texture of cooked rice etc and makes the
particular varieties unique/popular in the domestic and international markets.
As mentioned above basmati rice is the most sought after rice in the domestic and
international markets and it also fetches high premium. Commercially Taraori Basmati, Basmati-
370 and Basmati Type-3 are very popular. All these three varieties are similar in starch
characteristics but based on grain dimensions Taraori Basmati is preferred much over Basamati-
370. Similarly Basamati-370 is preferred more over Basmati Type-3. Pusa Basmati-1 has been
well accepted by the trade and there is good prospects for export. Infact, Pusa Basmati-1 is at
present most profitable variety in rice, in spite of being highly susceptible to major insects, pests
and diseases. Under proper crop management condition farmers can get 4-6 tonnes paddy yield
per hectare. This variety is much favoured by the farmers, traders and consumers. During
cooking it has got linear expansion. It is also easily digestible. Hence, this variety is much
preferred by the consumers in India and abroad.
With the every coming year, domestic as well as international demand for basmati rice is
increasing. If desired aroma in basmati rice along with other quality characteristics are
maintained, these measures may help to boost the export of basmati rice from India.
EXPORT PROMOTION POLICY
India is facing stiff competition in the world markets for the export of rice. Thailand,
Vietnam and Pakistan are the competitors for India in the export of rice. Thailand is occupying
first position in the international markets due to its better quality and low price. Vietnam was the
world's second largest exporter of rice but currently the demand for Vietnamese rice has steeply
declined in the international markets. Therefore, Indian rice exports are set to reach second place
after Thailand, edging out Vietnam as per report of Food & Agricultural Organisation (FAO).
There is also good scope for India to take advantage of the new trade policy for sustaining
the export of rice. This can be achieved if production is made keeping in view the demand of
international markets by increased investment in Research and Development coupled with
realistic export policy. The following export policies may be taken in to account to sustain the
export of rice in future:
1. Production of quality seeds and ensuring its availability to farmers at subsidized rates.
2. Low cost production technology may be developed to reduce the cost of production and
making Indian rice more competitive in the international markets.
3. Survey may be conducted to identify contiguous zones for cultivation of export quality
rice.
4. Quality of rice may be maintained keeping in view the requirements of the international
markets.
5. Breeding programme may be initiated to develop high yielding export quality rice both
for basmati and non-basmati rice to enable the exporters to compete in the world's
markets.
6. Production, procurement and processing of basmati rice may be organized in a systematic
manner for maintaining its quality for export purposes.
7. Conventional rice mills may be modernized to ensure high milling recovery of head rice
and effective availability of by- products for better and profitable utilization both for
industrial and feed purposes.
8. Intelligence wing may be set up to keep watch over the requirement of various rice
importing countries so that Research & Development may be strengthened accordingly to
produce quality rice for export purposes.
9. Export friendly trade policies may be adopted with improvement of infrastructure
facilities for promoting export.
10. Sufficient export facilities may be made available to the exporters at Sea Port.

SUGGESTIONS FOR SUSTAINING RICE EXPORT
Rice export constitutes a considerable share in the national exports. India is likely to be
major exporters next to Thailand during 2003 and its influence on the global rice trade will be
significant. Keeping in view the importance of rice in the national export items, concerted efforts
are required to be made to further promote the export of rice. There is a good scope for India to
take advantage of the new trade opportunities for promoting the export of rice. This can be
achieved if production is made as per the requirements of international markets by increased
investment in Research and Development coupled with export friendly trade policies.
The following are few of the measures suggested to sustain the export of rice in future:
1. Breeding programme may be initiated to develop high yielding export quality rice
(Basmati, Non-Basmati, Long Grain Rice, etc.) to enable the exporters to sustain their
export in future.
2. Survey may be conducted to identify export quality belts/zones for production of rice to
meet the requirement of exports.
3. Extension activities may be strengthened to educate the cultivators for production of
quality rice to match the standards of international markets.
4. Low cost production technology may be developed to bring down the cost of production
to enable the exporters to compete with competing countries in the international markets.
5. Proper arrangements may be made for procurement and processing of rice export purpose
as per the requirement of international markets.
6. Proper arrangements may be made for production of pure quality seeds and making them
available to the farmers at subsidized rates.
7. In case of basmati varieties, crop should not be allowed to lodge and there should be
proper water management in the field. If these are not attended properly, such situation
may affect both aroma and linear kernel elongation.
8. Post harvest operation is also very important. After harvesting, if produce is allowed to
remain at higher moisture level for a longer period, it will impair the intensity of aroma.