This is not India’s first time imposing an export ban on non-basmati rice, but the impact this time could be more far-reaching than before.

In October 2007, India imposed a ban on non-basmati exports, only to temporarily lift the ban and impose it again in April 2008, sending prices almost 30% higher to stand at the record high of $22.43 per hundredweight (cwt). 

Prices tripled in the span of six months, according to an agricultural research company, the International Potato Center (CIP). 

Samarendu Mohanty, Asian regional director at CIP, noted that India was not a major player in global exports of non-basmati rice back then, and the current ban has “a more far-reaching impact” than 16 years ago.

He added that the magnitude of the ban would depend on how other rice importers and exporters react.

If major rice exporters like Vietnam and Cambodia impose their own form of export restrictions, and significant importers like Indonesia and Malaysia scramble to stockpile, the world will be looking at “possible mayhem in the rice market,” Mohanty said.

He cautioned that it could even be worse than the aftermath in 2007.

“The scale of people impacted by Indian rice ban will be in millions,” said Mohanty, adding that poorer consumers in India’s neighbors, particularly Bangladesh and Nepal will be the hardest hit.

“There is very low probability of this export ban being lifted,” Mohanty said, adding that the ban is here to stay at least until India’s general elections in April next year.

The South Asian nation is currently wrestling with high vegetable, fruit and grain prices, a sticking issue which could hurt the election prospects of Prime Minister Narendra Modi.

India’s inflation rose to 4.8% in June on the back of soaring food prices — still within the central bank’s inflation target of between 2% and 6%.

However, inflation “threatens to come in at 6.5% in July,” HSBC estimated in a report dated July 24.

HSBC economists cautioned that extreme weather events could further put a strain on crop output.

“If shipments fall, there could be global price implications, spilling over into wheat, which is a part-substitute,” the bank noted. The economists said cereal prices are already rising both domestically and globally, with the latter also affected by the Black Sea grain deal.

Wheat prices jumped after Russia withdrew from the Black Sea grain deal.

Under the agreement, Moscow agreed to allow Ukraine to continue to export grain in a bid to prevent a global food crisis following the war on Ukraine.

But the Kremlin pulled out of the deal in July, claiming promises made to Russia under the deal were not met.