Rice exporters seek extension of interest subsidy scheme to boost shipments

Rice exporters on Tuesday sought an extension of the interest subsidy scheme, which ended last year, from the government as it will help in further boosting the outbound shipments of the commodity.

All India Rice Exporters' Association (AIREA) President Nathi Ram Gupta said that if the extension is not considered on priority, export might decline further and also lead to the closure of a number of units due to becoming economically unviable to sustain in business.

He said basmati rice has a long-gestation period of six months to one year during which it has to be stored and cured for exporting and because of the long-storage period, exporters incur a huge interest burden.

Further disruption in logistics and elongating supply time due to the COVID-19 pandemic is also impacting the rice exporters, he said in a statement.

"Interest accounts for a substantial margin to the overall cost of Basmati. The rice industry used to sustain and was able to maintain the growth in export due to support through the interest equalisation scheme.

"The association has been knocking the doors of all authorities concerned to extend the interest equalisation (or subsidy) scheme immediately," he said.

The scheme, he said, was there till September last year.

"The scheme was available till March 31, 2021, in consonance with the Foreign Trade Policy period 2015-20. However, the extant policy has now been extended up to March 31, 2022.

"But, the interest equalisation scheme was last extended and available up to September 30, 2021, only and the extension of which is pending for long," Gupta added.

During 2020-21, the total rice exports stood at USD 8.5 billion (USD 4 billion basmati and USD 4.5 billion non-basmati).

However, basmati exports declined 21.41 per cent during April-November 2021-22, according to the association.