Govt to revise MEP for basmati rice

NEW DELHI: The government will consider bringing down the minimum export price (MEP) for basmati rice further. It had recently abolished the export duty on basmati and reduced the MEP to $1,100 per tonne from $1,200 per tonne. States have now demanded a further reduction in the MEP of basmati in the backdrop of falling prices of the premium rice variety in the domestic market.

The proposal made by some states to bring down the MEP on basmati to $1,000 will be examined by the empowered group of ministers (eGoM) on food headed by external affairs minister Pranab Mukherjee, commerce secretary G K Pillai said. The date for the meeting, however, is yet to be fixed.

"There have been representations from state governments and we are taking the matter before the eGoM," Mr Pillai said to reporters on Thursday on the sidelines of India-USA Plastindia Summit organised by CII.

Representatives from various state governments had met top officials in the commerce department earlier this week to make a case for further reduction in the MEP as domestic prices of the rice has been steadily falling.

The government had placed restrictions on export of basmati rice in April last year as part of its overall attempt to check rising inflation in the country. India's basmati exports have declined by 12% to 7.6 lakh tonne in the April-January 2008-09 because of the restrictions. With inflation under control now and domestic prices of basmati declining, the government is now easing restrictions on exports.