Articles

As your mentor in the field of exports and imports, I want to bring your attention to an important amendment in the export policy of Non-basmati rice under HS code 1006 30 90. The Indian Government's Department of Commerce issued a notification on 20 July, 2023 that significantly changes the trading scenario for this commodity.

Previously, the export of Non-basmati rice was 'Free', meaning there were no specific restrictions. However, as per the new amendment, it is now 'Prohibited', indicating that export is generally not allowed. This is a noteworthy change that could have far-reaching impacts on traders and businesses involved in the export of Non-basmati rice from India.

There are, however, some exceptions to this prohibition:

1. If the loading of Non-basmati rice on a ship commenced before the date of this notification,
2. If the shipping bill is filed, vessels have already berthed or arrived and anchored in Indian ports and their rotation number has been allocated before this notification,
3. If the Non-basmati rice consignment has been handed over to the Customs before this notification and is registered in their system,
4. If there is a need to meet the food security needs of other countries, based on the request of their Government.

Moreover, the export of Organic Non-basmati rice will still be governed in accordance with earlier notifications.

The implications of this change are vast and might require you to re-strategize your business models, especially if you're involved in the export of Non-basmati rice. This is an excellent example of how dynamic the field of export and import is, and how crucial it is to stay updated on policies.

The provision that allows for the export of Non-basmati rice to meet the food security needs of other countries, based on their government's request, creates a special situation where export might be permitted despite the general prohibition. Here is a brief guide on how to proceed with such an opportunity:

1. Identify the Opportunity: The first step is to identify countries that are facing food security issues and may need to import rice from India. This could involve researching international news sources, following announcements from international bodies like the United Nations or World Food Programme, and maintaining close connections with contacts in potential import countries.

2. Government Request: In the context of this policy, the request must come from the government of the importing country. So, once you've identified potential opportunities, you should seek to establish contact with the relevant government departments in those countries. If they agree that there's a need for rice imports from India, they must formally request the Government of India to allow the export.

3. Application to DGFT: The Directorate General of Foreign Trade (DGFT) is the body that regulates India's export and import policies. Once you have a formal request from an importing government, you would likely need to apply to DGFT for a special permit to export Non-basmati rice. This application should include all necessary details and documentation, including the request from the foreign government.

4. Awaiting Approval: DGFT will review your application and make a decision. If they grant the permit, you will be allowed to export Non-basmati rice to the specified country.

5. Compliance with Other Laws: Even with the special permit, you must comply with all other relevant laws and regulations, both Indian and international. This can include everything from food safety standards to customs procedures.

As this situation unfolds, it's crucial that you keep yourself informed about these updates. Official websites like the DGFT, Ministry of Commerce & Industry, or news portals specializing in trade affairs are typically good sources for these updates.

In the meantime, to understand how such trade scenarios can evolve, I recommend you study the article on "How to seek approval for wheat flour trade legally after prohibition under food scarcity law" on our website. Although it's about wheat flour, the article provides a useful case study on how to navigate a similar situation: a prohibition on trade that allows exceptions under specific circumstances.

Remember, staying well-informed and adaptive are key qualities for success in the dynamic field of exports and imports. This policy change and its potential clarifications offer a valuable opportunity to practice these skills.

Being a regular exporter of rice, you should not view the new export policy as a complete setback. Instead, this could be a turning point for your business strategy. One of the viable options is to source rice from other countries where it is produced in large quantities (like Thailand, Vietnam, etc.) and then supply it to your regular buyers. This strategy, known as "Cross Border Trade" or "Re-export Trade", can keep your business afloat while the export policy in India is under prohibition.

Switching Bill of Lading (Switch BL) is another concept you may need to understand in this scenario. A Switch BL is issued to replace the original bill of lading issued at the time of shipment. The shipper can request a second set of bills, often for the purpose of concealing the actual country of origin of the commodity being shipped.

I recommend that you read this informative article on our website that provides a more detailed guide on how to navigate re-export trade

Considering the current prohibition on the export of non-Basmati rice, it would also be advantageous to shift your focus to other processed food products related to rice. Here are some options:

1. Rice Flour: Rice flour is a fine flour made from ground rice. It's gluten-free and can be used to make a variety of bakery products, noodles, and snacks.

2. Rice Bran Oil: Rice bran oil is derived from the hard outer brown layer of rice. It is used in cooking and has various health benefits, making it quite popular in many countries.

3. Rice Noodles: Rice noodles are staple food items in many Asian cuisines. They come in various shapes and sizes and are used in dishes like pho, pad Thai, and laksa.

4. Rice Cakes: Rice cakes are a low-fat, gluten-free snack that can be eaten plain or flavored with various spices and seasonings.

5. Rice Syrup: Rice syrup is a natural sweetener made from cooked rice. It's often used as a vegan and gluten-free substitute for honey or corn syrup.

6. Rice Beverages: There are also various types of beverages that are made from rice, including rice milk and rice wine (like sake), which have a global demand.

While considering these options, remember that each product will have its own market dynamics, production process, quality standards, and regulatory requirements for export. It is crucial to conduct thorough market research, understand the export policies related to these products, and consider the production and sourcing process before venturing into these fields.

Remember, your ability to diversify and adapt to changing market conditions is a vital part of being successful in the export-import business.

The services offered by Barai Overseas Export Import Consultation can be instrumental in addressing these inquiries:

1. Market Research: They can help you understand the global market for these products, including demand trends, major importing countries, and potential opportunities.

2. Regulatory Understanding: Their experts can guide you through the export and import regulations for these products in different countries to ensure your business stays compliant.

3. Sourcing Assistance: They can help you find reliable suppliers for these products, if you choose not to produce them yourself.

4. Quality Standards Compliance: Barai Overseas can guide you on meeting international quality standards and obtaining necessary certifications.

5. Logistics Management: They can assist you in devising the best methods for packaging and shipping these products, while maintaining their quality.

6. Competitor Analysis: Their consultants can perform a competitor analysis to give you an understanding of your competition and help you carve out a unique value proposition.

With the guidance of your Export Import Guru and the assistance of a comprehensive consultancy service like Barai Overseas, you can indeed make well-informed choices and navigate the dynamic field of export and import.