GoI to not levy 20 Percent rice tax but flour still under discussion: MoEA Minister

On 8 September 2022, the Directorate General of Foreign Trade (DGFT) of India’s Ministry of Commerce and Industry issued a notification that the Government of India (GoI) has prohibited the export of broken rice, and placed a 20 percent export tax on non-basmati rice, effective from 9 September 2022.

According to the Economic Affairs Minister Loknath Sharma, Army Welfare Project and the beer manufacturing industry require broken rice for brewing alcohol annually.

Currently, the country needs 28,000 to 30,000 MT of broken rice. Lyonpo said that the ministry is processing the request through the Ministry of Foreign Affairs to obtain the letter allowing the country to import the broken rice.

Lyonpo also said that Bhutan has not been levied a 20 percent rice tax by GoI due to the country’s free trade agreement with India.

“It has not yet been implemented, and Bhutan is most likely tax-free,” Lyonpo said.

Last year, Bhutan imported 25,353.066 MT of broken rice from India, valued at Nu 436.546 million (mn). Over all, Bhutan imported 93,727.656 MT of rice which includes rice with husk, husked (brown) rice, semi milled or wholly milled rice and broken rice from India worth Nu 2.617 billion last year.

India has restricted the export of flour like atta, suji and maida on 27 August 2022.

Lyonpo stated that the country is still unable to obtain the final approval to allow the wheat products import because GoI is having inter-agencies discussions.

“They will then supply to us after the approval, therefore, we must adjust for the time being. We just have one mill, and as a result, we are assisting Darlha Flour Mill in bringing wheat and producing maida, atta, and suji, etc,” Lyonpo said.

In the meantime, the ministry has approved the Food Corporation of Bhutan Limited (FCBL) and Darlha Flour Mill to import wheat from a third country. It will also be available for sale in big whole sale outlets and retail stores.

Annually, around 20,000 MT of maida, atta and suji worth Nu 275.60 mn is imported.

Lyonpo added that this is critical since it is directly related to bakery and noodle production. As a result, it has an impact on these companies.

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