Union Budget 2026: IREF urges Centre to offer tax breaks, logistics aid to strengthen rice exports

With the Union Budget 2026 around the corner, India’s rice exporters have stepped up calls for targeted fiscal support to strengthen the country’s competitiveness in global markets and ease mounting cost pressures. The Indian Rice Exporter’s Federation (IREF) has urged the Centre to introduce tax incentives, interest relief and logistics support, arguing that timely policy action could help the sector navigate rising operational challenges while sustaining export momentum.

In a set of proposals submitted to Finance Minister Nirmala Sitharaman, the federation has sought a 4 per cent interest subvention on export credit, 3 per cent support on road and rail freight, and faster disbursal of duty remission benefits. It has also asked for a one-time waiver of retrospective duty demands arising from the 20 per cent export duty imposed last year on select rice varieties. According to IREF, differing interpretations of the duty structure by exporters and field authorities have led to unintended tax disputes and financial strain.

“These measures will directly lower exporters’ costs, incentivise sustainability and encourage scaling up of value-added shipments,” said IREF president Prem Garg, adding that the upcoming Budget offers an opportunity to realign policy with the sector’s evolving needs.

India remains the world’s largest rice exporter, accounting for about 40 per cent of global trade. Government data shows that rice stocks have risen sharply, with reserves touching 57.57 million tonnes as of December 1, 2025—nearly eight times the official buffer norm. While heavy procurement has boosted food security, exporters say ample inventories also underline the need to maintain strong overseas demand to support farm incomes and rural employment.

At the same time, the industry is grappling with structural challenges. Garg flagged concerns over groundwater depletion in major paddy-growing regions, rising procurement and storage costs, and increasing price volatility. He said Budget 2026 could play a pivotal role in improving sustainability outcomes while keeping Indian rice competitive in global markets.

Among its key recommendations, IREF has proposed tax and investment incentives linked to verified water-saving and low-emission practices such as Alternate Wetting and Drying (AWD), Direct Seeded Rice (DSR), laser land levelling and energy-efficient milling. The federation believes such measures would encourage climate-smart agriculture while lowering long-term input costs.

The trade body has also called for a strategic shift towards higher-value rice varieties, including premium basmati, GI-tagged, organic and speciality non-basmati rice. This, it argues, would improve farmer realisations and reduce dependence on minimum support price-led procurement.

On logistics, IREF has recommended reimbursement of 3 per cent on eligible domestic freight for export-bound rice movements from production clusters to ports and inland container depots, backed by simpler digital claims. The move, it said, would help cushion exporters against freight volatility and improve competitiveness for inland players.

Finally, the federation has sought the continuation and better calibration of the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for rice, alongside the proposed waiver of retrospective duty claims. Together, these steps, IREF argues, would reduce litigation, ease cash-flow stress and bring greater stability to one of India’s most strategically important export sectors.

(With inputs from PTI)