Indian Government Scraps Basmati Export Tax

India's commerce and industry minister Kamal Nath announced that the Indian government has decided to scrap its export tax on basmati rice and cut the floor price for overseas shipments, as the government cautiously lifts controls imposed last year to ensure domestic supplies.

The cut in the floor price for basmati exports should cheer exporters, who have faced defaults from buyers in the Middle East and have lost market share to rival Pakistan.

Over the past two years, the Indian government had fixed a minimum export price for basmati rice, banned shipments of wheat and removed the import tax on crude vegetable oils. It has since reimposed import duty on crude soya oil.