Chinese to Have More Indian Rice on Their Plates

India has capitalized on the opportunity thrown up by the tariff war between the US and China since the beginning of 2018. Government data shows that during April-August 2018, India’s exports to China grew at an average of 52.9% year-on-year, subsequently helping India to reduce its trade deficit with China by $2.8 billion.

Further liberalizing its policies on farm imports from India, China has allowed five more Indian rice mills to export rice to the country, bringing the total to 24 rice mills. The first 100-ton consignment of Indian non-basmati rice was shipped to China in September this year.     

"China is the world's largest producer and importer of rice and buys more than five million tons per year. There is potential for India to export one million ton of rice to China in a few years. India's total rice exports increased from 10.8 million ton a year earlier to 12.7 million tons last fiscal. This allowed India to retain the top slot in global trade of the commodity," India's Ministry of Commerce said in a statement. 

The decision was taken after officials from China inspected rice mills that are capable of exporting non-basmati rice to China. 19 rice mills and processing units were cleared for export to China in May this year.

"India is keen to export agri products like rice and sugar to China in order to bridge the widening trade deficit," the Commerce Ministry added.

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When Indian Prime Minister Narendra Modi visited China in June this year, a Memorandum of Understanding (MoU) was signed between China's General Administration of Customs and India's Department of Agriculture on phytosanitary requirements for exporting rice from India to China.

Earlier this week, China also lifted a 7-year-old ban on import of rapeseed meal from India. The ban was imposed in 2011 and India's export of rapeseed meal was worth $161 million that year. India has a surplus of 500,000 tonnes of rapeseed meal for export every year. Rapeseed and soybean meals are used as a protein source for animal feed in China.

China imposed tariffs of 25% on a list of American products, including rapeseed meal and soybean meal, in July this year and subsequently removed tariffs on these products from five Asian countries, including India.

Bloomberg reported on Wednesday that India's Commerce Ministry also planned to boost shipments of 200 more products to China. Besides, India also wants China to scrap levies on items including uncombed single cotton, castor oil, menthol, granite, diamonds and glass envelopes for picture tubes.