The government on Wednesday scrapped the minimum export price (MEP) on basmati rice to boost exports.
"Basmati rice can be exported without any MEP," a notification by the directorate general of foreign trade said.
Earlier this year, the government had reduced MEP on basmati rice to United States Dollar (USD) 700 a tonne from USD 900 a tonne to make it more competitive in the global market.
Reacting to the development, All India Rice Exporters Association president M P Jindal said that this was a welcome decision as it would encourage export of Sharbati and Suganda rice varieties, which were neither basmati rice nor non-basmati rice varieties.
Jindal said these two varieties of rice were grown largely in Punjab, Haryana, Uttar Pradesh and Madhya Pradesh.
With different views, Chaman Lal Setia exports director Vijay Sethia said that the abolition of MEP on basmati rice would lead to export of inferior quality of rice as basmati rice.
He said "We used to protect our basmati rice by charging MEP. The MEP elimination would help the farmers and not the exporters."
India exports the premium aromatic rice variety to Saudi Arabia, Iran, Kuwait and Yemen. The country had exported 2.4 million tonnes in the 2011-12 fiscal, according to industry data.
As far as non-basmati rice is concerned, there is no MEP fixed on non-basmati rice.
The country has shipped 4.25 million tonnes of non-basmati rice since the export ban on the commodity was lifted in September, 2011, the industry data said.