Basmati exporters have urged the government to immediately suspend the ₹83 per tonne levy charged on contract registration for basmati exports, as reported by The Hindu BusinessLine. According to the Haryana Rice Exporters' Association (HREA), the industry is facing an exceptionally difficult period following the US-Iran war, with exporters already under severe financial and operational stress due to war-related disruptions, delayed realisations, higher freight, and blocked funds. The association has written to Agricultural and Processed Food Products Export Development Authority (Apeda) Chairman Abhishek Dev on April 7, highlighting the urgent need for relief measures.
The levy represents a substantial financial burden on the industry, with annual export volumes exceeding 60 lakh tonnes generating collections of more than ₹42 crore annually, excluding GST, as reported by HREA. According to HREA President Sushil Jain, the levy becomes extremely substantial when viewed in terms of actual export volumes - an exporter must pay ₹41.30 lakh (including GST) to export 50,000 tonnes of basmati rice, rising to ₹1.65 crore for 2 lakh tonnes. The Indian Rice Exporters' Federation (IREF) has also written to Apeda seeking immediate suspension of the levy, with IREF's acting president Rajeev Setia noting that the processing fee was raised from ₹30 to ₹70 per tonne in August 2025.
Exporters are facing multiple war-related disruptions including delayed export payments, shipment delays, cargo rollover, cargo diversion or return, demurrage, detention, warehousing expenses, higher freight, war-risk surcharge, emergency shipping charges, and increased marine insurance premiums, according to HREA. As reported by IREF's Setia, Indian basmati exporters operate in highly price-sensitive markets such as the Middle East and the EU, where the added costs cumulatively erode India's price advantage over Pakistan, especially for large-volume shipments. Small and medium exporters, who form a significant share of the ecosystem, are likely to be hit harder, potentially reducing their participation in export markets.
The additional levy threatens India's competitive position in global basmati markets, particularly against Pakistan, as reported by IREF. According to Setia, the cumulative impact of higher costs erodes India's price advantage, making it difficult for Indian exporters to compete effectively in price-sensitive markets. The crisis comes at a time when the industry is already struggling with war-related disruptions and operational challenges that have substantially worsened export conditions across key trade routes and markets.
