In Summary: Commerce and Industry Minister Amin Modad on May 20 claimed that the Government of India imposed an additional 4% on the existing 20% duty fee on the export of parboiled rice. However, the facts show that there has been no additional export tariff imposed by India on rice.
On May 20, Ami Modad, Liberia’s Commerce Minister, announced at a Ministry of Information press briefing an increment in the price of a 25-kilogram bag of Indian parboiled rice to US$18.50.
At 21: 58 of the nearly one-hour video, Minister Modad claimed that while the discussions on the price of Indian parboiled rice were ongoing, an additional 4% surge charge was imposed to the existing 20% export taxes that the Indian government had announced in 2022.
Claim
Said Minister Modad: “While we were discussing this (the price increment), India imposed another 4% surge charge so that brought it to 24%”.
Rate Justification
To fact-check this claim, first, we emailed the All-India Rice Exporters Association to inquire about any additional 4% surge charge on the 20% duty on rice export.
The Association, through its Executive Director Alok Bisaria, replied to our email stating that the “Government of India under its notification continues to levy duty at 20% on export of parboiled and non-Basmati rice from India.”
Second, we conducted multiple online searches and found articles from reputable foreign news outlets.
We found that in 2022, India imposed a 20% duty on export of white rice which was later extended to the parboiled rice on August 25, 2023, as reported by Reuters and other news outlets.
We did not find any publication indicating an additional 4% tax added to the earlier 20% duty export on rice as claimed by the Minister of Commerce and Industry.
However, we found articles from ETRetail.com, Business Standard, and India Today all quoting Reuters that India Customs Departments had informed rice exporters that the 20% export duty will be calculated based on the total transaction value and not the value shown in the shipping bill.
The new method taken by the Indian government is that the 20% duty export on rice will be calculated based on the total transaction value and the Free on-board (FOB) shipping value.
The article states that the India Customs Department was demanding exporters pay the difference of the 20% duty export on rice for the last 18 months.
According to Investopedia, FOB is a shipment term that defines the point in the supply chain when a buyer or seller becomes liable for the goods being transported. Purchase orders between buyers and sellers specify the FOB terms and help determine ownership, risk, and transportation costs.
Conclusion
Based on this fact, we conclude that the claim made by the commerce minister that India has imposed an additional 4% surge charge on the export of rice taking it to 24% duty export on rice is misleading.
The All-India Rice Exporter Association said the Indian government continues to levy duty at 20% on the export of parboiled and non-Basmati rice from India.
There is no additional 4% surge charge on rice export in India as claimed by Minister Modad.
This report is produced with funding from the USAID Media Activity. The funder has No say in the editorial decisions leading to the production of this content.