India's rice exports experienced remarkable growth in 2025, surging 19.4% to reach near-record levels after the government lifted all export restrictions. The world's largest rice exporter shipped 21.55 million metric tons during the year, marking the second-highest export volume on record and demonstrating the immediate impact of policy changes on trade flows.

Export Performance Breakdown

The lifting of export curbs in March 2025 enabled India to quickly regain its competitive position in global rice markets. Government officials reported that improved supply conditions, supported by record domestic production, facilitated the removal of the last remaining export restrictions that had been imposed during 2022 and 2023.

The 2025 export volume approached India's all-time record of 22.30 million tons achieved in 2022, before export restrictions were implemented. Non-basmati rice shipments drove the majority of growth, jumping 25% to 15.15 million tons, while basmati exports increased 8% to reach a record 6.40 million tons.

Market Expansion and Regional Demand

India's enhanced competitiveness resulted in significant market share gains across multiple regions. Non-basmati rice shipments expanded notably to several key destinations, including Bangladesh, Benin, Cameroon, Ivory Coast, and Djibouti. Meanwhile, premium basmati rice found increased demand from Iran, the United Arab Emirates, and Britain throughout the year.

The surge in Indian rice exports had broader implications for global rice markets, with increased shipments from India curbing exports from competing nations Thailand and Vietnam. This market dynamic contributed to driving rice prices in Asia to their lowest levels in nearly a decade, providing cost relief for consumers in Africa and other importing regions.

Competitive Positioning

India's dominance in global rice trade was reinforced by the 2025 performance, with the country typically exporting more rice than the combined shipments of the world's next three largest exporters: Thailand, Vietnam, and Pakistan. Industry experts attributed India's success to competitive pricing advantages that helped the country regain market share lost during the period of export restrictions.

The combination of policy support through the removal of export curbs, record domestic production, and competitive pricing positioned India to capitalize on global rice demand effectively. The strong performance across both basmati and non-basmati segments demonstrated the breadth of India's appeal in international rice markets, from premium specialty varieties to bulk commodity shipments.

The Indian Rice Exporter's Federation (IREF) has approached Finance Minister Nirmala Sitharaman with a comprehensive set of demands for the upcoming Budget 2025-26, seeking government support to enhance the competitiveness of India's rice export sector. The federation's representation, submitted on January 6, emphasizes the need for fiscal measures to address mounting challenges while promoting sustainable practices in the industry.

India's position as a dominant player in the global rice market underscores the strategic importance of these demands. The country accounts for approximately 40% of global rice trade and exported about 20.10 million tonnes of rice to more than 170 countries during the 2024-25 fiscal year, according to IREF President Prem Garg.

Key Financial Support Demands

The federation has outlined specific financial assistance measures to reduce operational costs for exporters:

These measures are designed to directly lower exporters' costs, improve cash flow management, and enhance price competitiveness in international markets. The federation particularly emphasized priority support for MSME rice exporters under the interest subvention scheme.

Sustainability and Production Incentives

IREF has called for tax and investment incentives linked to verified water-saving and low-emission practices to promote sustainable rice production. The federation specifically highlighted support for:

• Alternate Wetting and Drying (AWD) techniques
• Direct Seeded Rice (DSR) methods
• Laser levelling technology
• Energy-efficient milling processes

Additionally, the trade body seeks incentives to shift acreage towards higher-value paddy and rice varieties, including premium basmati, GI/organic/specialty non-basmati varieties. This strategic shift aims to improve farmer realization and reduce pressure on MSP procurement systems.

Duty and Compliance Issues

A significant concern raised by IREF involves the retrospective duty demands that emerged following the imposition of 20% export duty on certain rice varieties. The federation has requested a one-time waiver of these demands, citing inconsistent interpretation of duty calculations across field authorities.

"This has resulted in large, retrospective duty demands and prolonged disputes, despite exports being undertaken in good faith and without any undue gain," the federation stated in its representation.

The organization also emphasized the need for continuation and calibration of duty/tax remission under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme to offset embedded taxes and preserve export competitiveness.

Sector Challenges and Strategic Importance

Despite India's leadership position, the rice export sector faces several challenges that threaten long-term sustainability. Garg highlighted groundwater depletion in major paddy-growing regions, high procurement and storage costs, and market volatility as key concerns requiring government intervention.

"Rice exports remain a strategic economic asset supporting farm incomes, rural employment and the external sector," Garg noted, emphasizing that sustained leadership in rice trade strengthens India's economic resilience and diplomatic leverage.

The federation has also called for strengthening export finance guarantees and compliance infrastructure, including testing, traceability, and quality assurance systems, to protect India's reputation in premium international markets.