India Sends Panic Around World with Rice Export Ban, Higher Rice Taxes

Sep 1, 2023

Rice is the primary source of nutritional energy for over half of people on Earth. So when India bans exports of one type of rice, and then places a big tax on another type, the effects on the world food market can be severe. That's because the South Asian country exports more rice than any nation in the world.

India’s government last weekend placed a 20% export tax on parboiled rice. The move came just a month after a full ban on exports of non-basmati white rice. 

The reason? India’s government wants to make rice cheaper to buy at home. It believes the moves will lower prices for Indian citizens hit hard by rapid inflation. Inflation is the rising price of goods and services. Prime Minister Narendra Modi wants to limit any rise to the cost of food in his country because he faces re-election next year.  

Roughly 40% of the world’s rice comes from India. So these moves can have major effects on the global food market. Other factors have also caused a spike in food prices. Russia’s invasion of Ukraine and severe weather have increased food prices around the world.  

India’s moves have raised concerns that rice will soon be in short supply. Some consumers in the US and other parts of the world have begun panic-buying the grain. They’ve run out and bought large amounts of rice. 

US farmers produce a large supply of rice on their own. So fears of a rice shortage in the US are misguided, US rice growers say. But countries in Africa and Europe could see a big impact on the price and supply of rice. 

Photo from Unsplash courtesy of Pille R. Priske.

Reflect: What are some different reasons why a country might want to make sure it has enough food for its own people before selling it to other countries?

Based on numbers in the story, the reader can conclude that _______. (Common Core RI.5.1; RI.6.1)
a. the export tax on parboiled rice is 50%
b. roughly 40% of the world's rice comes from India
c. rice prices have decreased by 20% due to India's actions
d. India produces 100% of the world's rice
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