The Commerce Ministry allowed export of 10 lakh tonnes (lt) of non-basmati rice to 21 African countries because of the notification by the Directorate General of Foreign Trade (DGFT).
Earlier also, the
DGFT had issued similar exemption notifications like for example on March 26, 2008, export of 40,000 tonnes was permitted to the Republic of Sierra Leone whereas on October 13, 2008, 55,000 tonnes were permitted for export in Nigeria, Senegal, Ghana and Cameron.
Though the notifications had specified that the exports were to be carried out by designated public sector undertakings (PSUs) namely STC, PEC and MMTC, yet the invoice seem to suggest the name of a third party which was a Delhi based private trading firm and on the other hand though the consignee was the Ministry of Trade and Industry, Government of Sierra Leone, the actual buyer was a commodity trader based in Switzerland.
Another recent case was when the Minister of Foreign Affairs and International Cooperation of a certain African country sought permission to buy 30,000 tonnes of Indian white rice for immediate shipment but in a letter dated 31 March, 2009, it was requested that the concession to export/ship the rice be given to a particular Delhi-based trader since it already had past experience of dealing with such situations.
When asked about this seemingly inconsistent practice, a top Commerce Ministry official said it was an accepted practice for parastatals to subcontract transactions to private parties as there was a ban on non-basmati exports from the country, therefore, it was necessary to route all shipments (exempted from the ban) through PSUs.
The official also informed that “the PSUs are essentially routing agents through whom we can monitor the quantities being shipped. Whether they export directly or through private traders and whether the LCs and payments come from Switzerland or Africa does not really concern us”.
On 5 March, 2009, the Empowered group of Ministers had considered a proposal for lifting the ban on non-basmati rice exports. However, the proposal got deferred, and instead the export of 20 lt to Africa through the government-to-government route was approved.
Industry sources also said that “the export ban by India is helping keep global prices high. At the same time, by selectively allowing exports through so-called diplomatic channels, you are enabling a few firms to derivate arbitrage benefits”.
Currently it will cost not more than Rs 17,000 or $360 a tonne to ship out rice from Indian ports.
Source : iitrade.ac.in