After a diplomatic gaffe, the government has initiated rice diplomacy with Bangladesh days before Congress president Sonia Gandhi and Prime Minister Manmohan Singh are scheduled to visit the country.
Price of rice, country's staple diet, had increased by 42 % in March 2011 as compared to the previous year. India had promised to supply rice at price lower than international prices.
On Monday, an Empowered Group of Ministers headed by finance minister Pranab Mukerjee decided to export three lakh tonnes of non basmati rice to Bangladesh at a price of Rs 20,000 for a tonne.
The decision was taken after the Food ministry reported shortage of storage facility for rice because of a bumper crop and said most of the godowns were overflowing.
In all, the EGoM decided to allocate eight lakh tonnes of non-basmati rice for diplomatic purposes. It means the rice will be exported to countries at less than international price as a goodwill gesture, said a senior government official.
This also means lifting of a ban of export of rice, which was imposed in April 2008 when domestic prices of food started to increase because of high inflation. While food inflation has remained at a high of 7.61 %, the prices of food had been stable.
A formal announcement is likely to be made before Sonia Gandhi's slated visit to Bangladesh on July 25. Bangladesh is honouring former prime minister Indira Gandhi for providing military assistance in independence struggle of the country. Prime Minister Manmohan Singh will be visiting Bangladesh in September. Earlier this month, the off the record comments of Singh with media on Bangladesh were put on a government website causing a minor diplomatic row.
The move comes ahead of Congress chief Sonia Gandhi and Prime Minister Manmohan Singh visit to the country.
India has promised to supply three lakh tonnes of non-basmati rice at a price lower than international price.
The group of ministers decided to allocate eight lakh tonnes of non-basmati for diplomatic purposes to other nations.