Why is India exporting white rice to Singapore despite a ban?

The Indian government has decided to export white rice to Singapore despite the ban the government had introduced on exports of non-basmati white rice in July 2023. The announcement was made by the Ministry of External Affairs (MEA) on Tuesday evening (August 29), saying that the decision has been taken to meet the food security requirements of the South East nation.

What did the ministry say?

The MEA in its statement said, “India and Singapore enjoy a very close strategic relationship, characterised by shared interests, close economic ties, and strong people to people connect. In view of this special relationship, India has decided to allow the export of rice to meet the food security requirements of Singapore.”

Our response to media queries on export of rice to Singapore:https://t.co/RfmpXV38jR pic.twitter.com/lzqbRlzesb

— Arindam Bagchi (@MEAIndia) August 29, 2023

On August 27, India decided not to allow the export of non-basmati white rice below $1,200 tonne.

• The move caused panic in countries like US and Canada, where there is a massive demand for this rice. 
• Several people ran to the supermarkets only to purchase bags of rice to deal with the short supply thereafter.
• Many experts believe that this could trigger a global food crisis as India is an exporter of 40% of the global supply of rice. 

Notably, the non-basmati white rice was prohibited from export to check the domestic prices and ensure food security. Although parboiled and basmati rice was allowed to be exported, the government noticed that even non-basmati white rice was being illegally exported under the HS codes of parboiled and white rice. 

Why has Singapore been exempted from the ban?

The reason why Singapore is exempted from the ban is because India and Singapore share close diplomatic and trade ties, exceeding $30 billion. Singapore is considered to be one of the closest allies of India in Asia, and the island country has several of its investments in India.

• Singapore authorities had been urging the Indian government to exempt them from the ban as there is a huge demand for non-basmati rice in Singapore.  
• Singapore is highly dependent on Indian white rice. In 2022, India accounted for 40% of Singapore’s imported rice. Moreover, non-basmati rice from India makes up about 17% of Singapore's imported rice.

Besides the exemption from the rice ban, India has several strategic reasons for keeping the island nation happy.

• Singapore is an important investment source and destination for Indians. 
• It was also the first country with which India signed the Comprehensive Economic Cooperation Agreement, which is currently being upgraded. 
• Singapore has strong ties with Indian states like West Bengal, Andhra Pradesh, Rajasthan, and Telangana.
• Both the countries are seeking to explore other areas such as tourism and skill development. 
• Singapore is also an essential partner in many areas of India’s development priorities, including smart cities, urban solutions, the financial sector, skills development, aviation and industrial parks.