Pakistan plans to extend duty drawback benefit to its Basmati exporters beyond June, as it has helped improve shipments of the aromatic rice. The benefit was introduced in late January. But Indian exporters are worried about a dip in realisation in global market due to lower rates offered by Pakistan. This comes at a time when they were expecting normalisation of trade with West Asia after reopening of the Strait of Hormuz.

Pakistan’s Ministry of Commerce on January 23 issued an order providing benefits of drawback of local taxes and levies collected from the rice sector until June 30. Per the order, Basmati exporters are eligible to claim 9 per cent of the f.o.b (free-on-board) value of the exported rice if they ship the aromatic variety at $750 per tonne or more. The rate is 3 per cent of the f.o.b value if exported below $750 a tonne.

“The order actually helped Pakistan to improve its Basmati export, even if it is much less compared to India. But the problem is such a low rate of $750/tonne fixed by it becomes a benchmark internationally when Indian rice exporters negotiate deal,” said a leading Basmati exporter. He said the extension of this duty drawback benefit order for another six months, if approved, will not be in favour of Indian trade, not for the benefit of Basmati as a brand.

$920/t realisation

Rice Exporters Association of Pakistan (REAP) Chairman Faisal Jahangir was quoted by Pakistani media that the drawback on local taxes and levies (DLTL) scheme would help lower export prices and improve Pakistan’s ability to compete with global suppliers. He had said that Indian rice was currently being offered at significantly lower prices, making it difficult for Pakistani exporters to maintain their foothold in international markets.

However, Indian Basmati rice realised an average $920/tonne in April 2026, which is much above the rate fixed by Pakistan at which their rice exporters are eligible to claim 9 per cent benefit, sources said.

According to APEDA data, Basmati export by India in April 2026 was 474,091 tonnes worth $436.01 million. In 2025-26 fiscal, exports of Basmati rice were 6.52 million tonnes (mt) worth $5.67 billion.

Land route to rescue

Unlike India, there is no prior registration of export contract in Pakistan, nor there is any levy for it, trade sources said.

Pakistan had exported nearly 1 mt of Basmati rice in 2025-26, trade sources said, adding that there was a major drop in shipments during January-March period. However, due to the duty benefit order, exports are said to have picked up during April-May despite West Asian countries having a share of 62 per cent in global Basmati trade.

India trade sources said that the war has not impacted Pakistan’s Basmati rice export as in three months during March-May of 2026. It exported 28 per cent of the volume shipped in entire July-June of 2024-25. Pakistani exports mostly relied on land route, as an alternative, via Iran to central Asia.

Published on June 17, 2026