The Hindu Business Line : FICCI writes to Manmohan on basmati export levy

New Delhi, May 18 The Federation of Indian Chambers of Commerce and Industry (FICCI) has written to the Prime Minister, Dr Manmohan Singh, and the Finance Minister, Mr P. Chidambaram, opposing the Government’s decision to impose export duty on basmati rice and lowering its minimum export price.

In a letter to the Prime Minister on Friday, the chamber stated that since the consumption of basmati rice in the country accounted for 0.2 per cent of the overall domestic demand, the Government’s decision would not subside the inflationary pressure.

“In the fiscal 2006-07, 1.06 million tonnes of basmati rice worth of Rs 3,064 crore was exported and farmers of basmati paddy realised Rs 2,298 crore.

“The average year-on-year growth of basmati exports has been 12 per cent between 1991-92 and 2006-07, with India garnering 53 per cent share in the global market,” said FICCI in a statement.

Reduce competitiveness

“In this scenario, the Government’s decision to impose an export duty of $200 a tonne on basmati rice and lower the minimum export price to $1000 a tonne will not have any impact on inflation.

“It will instead lead to loss of competitiveness in the export markets,” the chamber stated.

Will hurt growers

The chamber said that basmati farmers’ income doubled in two years as prices rose to due to increasing imports from some countries.

However, it expressed concern that reduced level of exports due to such a decision, would hurt the income of the basmati rice growers.

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