Non-basmati rice exports put on hold

Following allegations of malpractice and a Delhi High Court order, the Directorate General of Foreign Trade (DGFT) on Friday decided to put exports of one million tonnes of non-basmati rice on hold. An empowered group of ministers set up by the Commerce Ministry had recently lifted a three-year ban on the exports.

“Operation and implementation of the allocation made in terms of the trade notice of July 27 is stayed in view of the order passed by the High Court,” said a press release. On July 19, DGFT had notified the Centre’s decision to allow exports and made allocations of the entire quota to 82 exporters on July 27. Each exporter was allowed to export 12,500 tonnes of basmati rice at a minimum export price of $400 per tonne.

Traders were directed to submit their requests for exports between 10 am on July 21 and 5 pm on July 22. Applications that failed to make the cut-off date were not entertained. Meanwhile, the Delhi High Court stayed the allocation after a group of traders moved court challenging the process alleging malpractices. However, by the time the court order reached DGFT, the process had been completed. The traders alleged a few rice exporting companies had managed to flood the IT server at DGFT by repeatedly sending the same application which resulted in a system failure. As a consequence, despite submitting requests for export at 10 am on July 21 and receiving duly signed acknowledgements from the authorities, some of them were denied export quantities. While applications that were filed at a later time and date were allocated the quantities.

While the DGFT has sought the Law Ministry’s opinion, it had to stay the allotment process. The government had allowed one million tonnes of non-basmati rice exports following record output. Exports of rice had been prohibited since April 2008.