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To tame the surging inflation, the Indian government has completely slashed down the import duty on several varieties of rice to nil. To curb down the rising pricing of rice in international market, the UPA government would allow duty free import of rice.

Every year India produces 90 million tonnes of rice. Although India is the major exporter of rice from last 10 years and is supplying it to different countries throughout the world, the step of completely writing off custom duty on rice, is welcomed by the Indian manufacturer and supplier. In the dawn of 2008, the UPA govt. with an aim to slow down the export rate of rice, has considerably increase the minimum prices of non basmati rice exports to $650 per tonne. In a move to keep the inflation rate under control, Indian government has eliminated the custom duty on rice, which brings it down to zero.

India is considered as a major global supplier of grains, which exports around 4 million tonnes of grain annually, which includes 1 million tonnes of aromatic basmati rice. The specialty of aromatic basmati rice is that, it is exclusively grown only in the northern areas of both India & Pakistan. The rising prices of rice have triggered the inflation rate from the last 3 months. Scrapping down of custom duty to zero, will cushion the prices of rice from risen in the worldwide sector. Earlier the custom duty on rice was at 70 per cent. To keep check out the rising rate, the Central Government is all set to bring down the duty to zero.

In a bid to check out the rising inflation rate, the government has cut down the import duty on rice. This cut is applicable on wholly milled and semi milled rice. The government has decided to make this elimination effective for 1 year i.e, till 31st March, 2009.The Indian federal government's move to slash down the import duty of rice to zero, is considered as a move for stabilizing the price of staple food. The cut will get effective from the midnight of March 20-21, 2008. The prices of rice in the international market have seen a 37% rise from the past six months, which has increased from $430 to $590. The prices of rice have witnessed a same rise in the domestic market also. During the aforesaid time limit, the domestic retail prices are increased from Rs.15 per kg to Rs. 18 per kg. In tune of the surging demand in the local and international market, the prices of rice have seen a steady upward trend, which in turns forced the finance ministry to slash down the duty and brings it to zero.

Checking out the various soaring food prices, the government has taken out the remedial fiscal steps and cut down the custom duty exemption on rice from the hitherto existing duty of 70%. The government's move of slashing down of import duty on rice, is expected to decrease the retail prices in local & international marketplace.