Haryana Basmati Exporters Are Looking For Cheaper Market Levies

Haryana's basmati exporters have asked for a reduction in levies such as the mandi fee, rural development cess, and arthia (agent) commission imposed on the purchase of paddy from the current collective 6.5% to bring them in line with those in other key producing states such as Punjab, Delhi, and Uttar Pradesh.

In Delhi, Uttar Pradesh, and Uttarakhand, the levies are 3%, 3.25% in Rajasthan, and 4.5% in Punjab. Higher levies cut into the profits of Haryana's basmati exporters, prompting many dealers and processors to buy rice from Delhi and Punjab. Haryana, which accounts for more than half of all basmati exports from India, charges a 2.5% arthia commission, a 2% market tax, and a 2% rural development cess, bringing the total burden to 6.5%.

"Higher taxes on basmati paddy procurement are affecting not just exporters and processors, but also farmers' revenues," said Vijay Setia, past president of the All India Rice Exporter Association and a Karnal-based basmati rice exporter. The Haryana government raised the market or mandi charge on basmati as well as the rural development cess from 0.5% to 2% in June of last year. 

Haryana Rice Exporters Association (HREA) wrote to Chief Minister Manohar Lal Khattar, requesting that rice millers be given an equal playing field with exporters from other states in order to compete in the global market. According to the report, numerous rice millers and exporters have shut down their operations owing to reoccurring losses. Khattar had promised exporters that the fees and other levies at mandis would be reviewed.

According to exporters, this kharif season's basmati harvest will begin arriving in mandis on October 1. According to them, the Haryana government must make a decision on lowering taxes quickly. In 2021-22, India exported $3.54 billion in Basmati rice. In 2021-22, Saudi Arabia, Iran, Iraq, Yemen, the UAE, the United States, Kuwait, the United Kingdom, Qatar, and Oman accounted for over 80% of total exports of aromatic long-grain rice from India.