NEW DELHI (Reuters) - India has scrapped its export tax on basmati rice and cut the floor price for overseas shipments, the trade minister said, as the government cautiously lifts controls imposed last year to ensure domestic supplies.
A panel of ministers decided to cut the export tax to $1,100 per tonne from $1,200 per tonne, but did not impose an expected tax on crude palm oil imports, Kamal Nath told reporters late on Tuesday.
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.
But Vijay Setia, president of All India Rice Exporters' Association, said traders had been expecting a bigger cut in the floor price.
"We welcome this but the government should again review the situation and reduce the minimum export price to $1,000 per tonne," he told Reuters.
Over the last two years, India 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 soyoil.
Later moves came as the ruling coalition struggled to rein in inflation a year ahead of general elections.
India's inflation rate, which had soared to nearly 13 percent in early August, has fallen to an annual 5.2 percent, which the deputy chairman of the Planning Commission said on Tuesday was normal and reasonable
Source : REUTERS INDIA