The Cabinet on Thursday removed the ban on the export of superior quality of non-basmati rice priced at over $425 per tonne.
Information and Broadcasting Minister PR Dasmunsi said the decision was taken after the government received representations from rice growing states. The government had banned export of non-basmati rice since October 9.
The move received flak from both rice exporters and farmers, who felt that it prevented their access to lucrative global markets.
The commerce ministry has also demanded that all stocks lying at the ports for exports before that date should be allowed to be exported.
India exported 3.7 million tonne of non-basmati rice valued at Rs 4,258 crore in 2006-07.
The Cabinet also approved the proposal to terminate the Purchase Preference Policy (PPP) on products and services of public sector companies from March next year.
"The Union Cabinet today gave its approval to reiterate the earlier decision of the government that PPP for products and services of CPSEs will be terminated with effect from March 31 next year," Dasmunsi told reporters after a meeting of Cabinet Committee of Economic Affairs (CCEA) in New Delhi.
"The decision will result in a level-playing field between CPSEs and private sector players and increase competition," the minister said.
"The Supreme Court has already been requested to extend the time for review as the matter involved consultation with various agencies," he said.
Under the policy, which has been in place since 1992, central public sector undertakings enjoy purchase preference if the price quoted by it falls within 10 per cent of the lowest bid.
The policy has been reviewed time and again and accordingly guidelines have been issued with or without modifications. The policy was last reviewed by the government on June 30, 2005, and guidelines with certain modifications were issued on July 18, he added.
The Union Cabinet also approved proposal for amendments to Tyre Corporation of India Limited (Disinvestment of ownership) Bill, 2007 paving the way for disinvestment of the sick public sector company.
The cabinet also approved refund of value added tax (VAT) it had collected from industries in two union territories -- Daman and Diu, and Dadar and Nagar Haveli, which enjoy tax holiday.