MoU between India & Indonesia on Non-Basmati White Rice Trade

The Union Cabinet has approved the Memorandum of Understanding (MoU) signed by the Union Ministry of Cooperation and the Ministry of Trade of Indonesia. The approval was given in a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi in New Delhi. 

Terms of the MoU

• India will supply one million metric tonnes of non-basmati white rice to Indonesia per year at the prevalent international price.
• The duration of the MoU will be four years and will be automatically extended for four years.
• The rice will be supplied to Indonesia by the National Cooperative Exports Limited.
• The National Cooperative Exports Limited will source the rice from the cooperative societies only.

The export of rice is likely to improve the trade balance which is heavily in favour of Indonesia.

In 2023-24 bilateral trade between the two countries was US$29.4 billion. India’s exports to Indonesia were 5.99 billion and its imports were $23.4 billion.

Indonesia is India’s eighth-largest trading partner, while India is the second-largest buyer of Indonesian coal and crude palm oil.

Export of Rice from India 

India, which is the largest exporter of rice, exports many varieties of rice but the main varieties are basmati and non-basmati white rice.

Basmati rice is a premium rice and in 2023-24 the major export destinations of basmati rice were Saudi Arabia, Iran Iraq, United Arab Emirates, the USA, and Yemen.

The total export of non-basmati rice in 2023-24 was Rs. 37804.48 Crores or $4570.06 Million. The major export markets were Benin, Guinea, Togo, Cote D Ivoire, and Vietnam.

Ban on the export of Non-Basmati Rice 

To control the price of rice in India the government banned the export of non-basmati white rice on 20 July 2023.

The export was allowed only to those countries that requested Indian rice to meet their food security requirements. 

The ban on the export of non-basmati rice was removed by the government of India in September 2024 but it imposed a minimum export price of $490 per tonne.

About National Cooperative Exports Limited (NCEL)

The National Cooperative Exports Limited (NCEL) was set up in 2023 as a Multi-state Cooperative Society under the Multi-State Cooperative Society Act, of 2002.

It has been jointly promoted by the Gujarat Cooperative Milk Marketing Federation (GCMMF), Indian Farmers Fertilizer Cooperative Limited (IFFCO)., National Agricultural Cooperative Marketing Federation of India Limited (NAFED), Krishak Bharati Cooperative Limited (KRIBHCO) and National Co-operative Development Corporation (NCDC).

Function 

The National Cooperative Exports Limited is an umbrella organization for exports by the cooperative sector of the country.

Headquarters: New Delhi

Managing Director: Unupom Kausik