Non-basmati exporters to get 5% benefit under merchandise exports scheme
Exporters from the world’s biggest rice exporting nation have been given a breather by the Indian government who will extend a 5% benefit to non-basmati exporters under the Merchandise Exports from India Scheme (MEIS) as relief from firm domestic prices that made exports less profitable.
India exports a quarter of the rice in the world mainly to Africa, the US, Europe and South-East Asian nations.
The scheme will come into effect from November 26 and continue till March 2019, , a notification from Directorate General of Foreign Trade said. Non-basmati rice includes husked brown rice, parboiled rice, broken rice and others, it said. “Owing to high minimum support price of paddy, we have been un-competitive in global exports despite rupee depreciation. Rice export has seen a drop of 10% in the past six months. The incentive will make us competitive in the global market,” says BV Krishna Rao, president of the Rice Exporters Association.
Under the MEIS scheme,exporters will get a certificate or scrip from DGFT that can be traded. For example, if the value of export is $100, the company get $5 MEIS scrip, which it can sell.
Rao added that the hike in MSP led to an increase of $40 per tonne at $ 375- $380 a tonne. “We can now expect new contracts to be signed and be competitive compared to Thailand, Vietnam and Pakistan,” he says.
Rice is India’s main kharif crop and this year’s advance estimates said production is likely to be 99.24 million tonnes or 1.78% more than the previous year. India annually exports 8-9 million tonne non-basmati rice. Non-basmati rice exporters were seeking 10% MEIS to ease intense competition from other exporting countries.
They also sought interest rate subvention to avail loans from banks at a 5% lower rate as part of relief.
By BOA Bureau