Non-basmati white rice: IMF 'encourages' India to remove export restrictions
Washington (PTI): The International Monetary Fund has said it would "encourage" India to remove restrictions on export of a certain category of rice, which, it said, would have an impact on global inflation.
The Indian government on July 20 had banned the export of non-basmati white rice to boost domestic supply and keep retail prices under check during the upcoming festive season. This type of rice constitutes about 25 per cent of total rice exported from the country.
There would be no change in export policy of par-boiled non-basmati rice and basmati rice, which forms the bulk of exports, the food ministry had said in a statement.
In the current environment, these types of restrictions are likely to exacerbate volatility on food prices in the rest of the world. They can also lead to retaliatory measures, Pierre-Olivier Gourinchas, Chief Economist, International Monetary Fund (IMF), told a press conference here.
"So, they are certainly something that we would encourage the removal of these types of export restrictions, because they can be harmful globally," he said in response to a question.
The total exports of non-basmati white rice from India was USD 4.2 million in 2022-23 as against USD 2.62 million in the preceding year. Major destinations of India's non-basmati white rice exports include the US, Thailand, Italy, Spain and Sri Lanka.
In order to ensure adequate availability of non-basmati white rice in the domestic market and to allay the rise in local prices, the government has amended the export policy from 'Free with export duty of 20%' to 'Prohibited' with immediate effect.
The IMF in its latest economic update released here on Tuesday projected India's growth rate to be 6.1 per cent for fiscal year 2024, which is slightly up from 5.9 per cent estimated projection for the same period in April.
"India remains an economy that is growing quite strongly. I mean, it's coming down from really a very strong year in 2022, at 7.2 per cent. That was also revised upwards, by the way -- but still slow down, but still fairly strong growth and fairly strong momentum," Gourinchas said.
Later in an interview, when asked about India's rice export ban, Daniel Leigh, Division Chief, IMF Research Department, told PTI that the context is clearly, an environment of declining inflation around the world.
"That's important because then it allows monetary policy to ease up and not to start increasing interest rates, which means currencies move around," he said.
"We see it in the interest of the overall global community to keep that food and energy inflation trend down. Now the challenge is that if we see restrictions in other countries as well as India, we've been very clear that in our view we understand the domestic consideration, but if you see that global impact, then that would go against the reduction in inflation. So our perspective is that such restrictions should be phased out as soon as feasible," Leigh said.
He also said that India's digital public infrastructure is really world class and it is enabling efficiency gains for businesses.
"Really what is great to see is India sharing its experience with the other members of the G20. Under its presidency of the G20, India is helping to spread the understanding and the opportunities and the risks that we need to talk about when it digitises more generally," he said.
The Indian economy, Leigh said, has already been very robust. "But the reforms when it comes to female labour force participation to make it easier for women to stay in the workforce, for the youth to find the kind of training that they need. This is a very dynamic economy. The question is how to maximize the potential," he said.
"India's economy is growing strongly and also inflation is in the range of the central bank target. So those are positive things and the growth forecast itself is for growth of 6.1 per cent this year. This means that basically 16 per cent of the world economy, one in six of the world's economic growth is coming from India," he said,
Referring to the upward revision of the Indian growth projections, Leigh said this is mainly because of what happened at the end of last year. More government investment, more private investment, give it the economy boost and that has a knock on effect for this year, he said.
"Now we do see growth continuing to be above six next year as well, 6.3 per cent and in the medium term about six per cent. This is the kind of above average growth for the region that is really going to help economic well being," Leigh said.
Noting that the IMF expects India's inflation to be at 4.9 per cent and then 4.5 per cent next year, he said the monetary policy action really deserves a lot of the credit for this 250 basis point increase in the interest rate since May of last year.
"There's also though the fortunate decline that all of the countries are benefiting from in food and energy prices globally. This is also driving inflation down," Leigh said.
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Putin meets Iran's FM Araghchi, says Russia ready to do its best to help bring peace to West Asia
Moscow (PTI): Iran's Foreign Minister Abbas Araghchi on Monday met Russian President Vladimir Putin, who hailed the Iranian people for fighting bravely and heroically for their sovereignty and said Moscow is ready to do its best to help bring peace to West Asia as soon as possible.
Araghchi, who held talks with Omani and Pakistani leadership before arriving in Russia, met Putin in St. Petersburg and thanked him for supporting Iran, state-owned TASS news agency reported.
"Russia is ready to do everything in its power to ensure that peace in the Middle East is achieved as soon as possible," Putin said during his meeting with Araghchi, which was also attended by Russian Foreign Minister Sergey Lavrov.
Revealing that he received a message from Iranian Supreme Leader Mojtaba Khamenei last week, Putin asked Araghchi to convey his "gratitude for this message and best wishes for his health and well-being."
He praised the Iranian people for fighting "bravely and heroically" for their sovereignty, Iran's state-run PRESS TV reported.
"We really hope that, based on the courage and desire for independence, the Iranian people, under the guidance of the new leader, will weather this difficult period of trials and peace will come,” Putin said.
He also stressed that Russia “intends to maintain” its strategic relations with Iran.
Araghchi said that the world witnessed Iran’s strength in countering the US during the recent war, and that the Islamic Republic is a "stable and powerful establishment."
"With their courage, the Iranian people succeeded in resisting the US aggression and will be able to endure it,” he said.
He said that it became clear that Iran has “great friends and allies” like Russia, and conveyed “warmest greetings” from Supreme Leader Mojtaba Khamenei and President Masoud Pezeshkian to the Russian leader.
Araghchi said relations between Moscow and Tehran represent a “strategic partnership at the highest level” and will continue to develop "regardless of circumstances."
"We are grateful to you for the solid and strong positions in support of the Islamic Republic of Iran," he said.
Foreign Minister Lavrov said that the talks between President Putin and the Iranian Foreign Minister were "useful and constructive."
Kremlin Spokesman Dmitry Peskov later said that Russia is "ready to provide any good offices, any mediation services that are acceptable to the parties."
"We will be ready to do everything so that ultimately peace ensues, guaranteed peace, and that there is no return to hostilities," Peskov was quoted as saying by TASS.
He was asked how Moscow can assist in future negotiations on the Iranian settlement.
Araghchi arrived in Russia after his whirlwind trip to Islamabad, which, according to him, was “very productive” and involved “good consultations" with Pakistan's Army Chief Field Marshal Asim Munir, amid uncertainty over the second round of peace talks to resolve the war in West Asia.
"We held good consultations with our friends in Pakistan. The trip was successful. We assessed the outcome of our recent (meetings) and discussed in what direction and under what conditions talks can move on,” Araghchi said in a video posted on his Telegram channel upon his arrival in St Petersburg.
Referring to the second round of talks between the US and Iran to resolve the conflict in West Asia, Araghchi said: "Developments have taken place in the negotiations."
"Despite some progress in earlier rounds, the talks failed to reach their objectives due to the Americans' approach, the excessive demands they made, and the wrong approaches they adopted. Therefore, it was necessary to consult with our friends in Pakistan to review the latest situation,” Iran's official news agency IRNA quoted him as saying.
He said that the trip to Pakistan was a good opportunity to review developments related to the US-Israeli war against Iran, expressing confidence that “these consultations and coordination between the two countries will be highly significant.”
Araghchi arrived at St. Petersburg's Pulkovo Airport early Monday, where he was welcomed by Russian officials and Iran’s ambassador to Russia, Kazem Jalali, the report said.
The first round of peace talks between Iran and the US, held on April 11 and 12, failed to bring the desired result for the parties to the conflict.
The Iranian minister arrived in Islamabad for the second time on Sunday after a short visit to Oman, where he held talks with Sultan Haitham bin Tariq al-Said on security in the Strait of Hormuz and diplomatic efforts to end the Iran-US conflict.
After Araghchi left Pakistan for Oman on Saturday, President Donald Trump announced that US negotiators Steve Witkoff and Jared Kushner would no longer be going to Islamabad for talks with Iran, contending that Washington held all the cards on the matter.
Trump on Sunday reiterated that the US and Iranian officials can talk by phone for a peace solution to the conflict.
On Tuesday, Trump extended the two-week ceasefire with Iran indefinitely to give Tehran more time to prepare a unified proposal to end the war, just hours before the truce was set to expire.
The war began when the US and Israel jointly attacked Iran on February 28, killing Iranian Supreme Leader Ayatollah Ali Khamenei and several top commanders. The retaliation by the Islamic Republic extended the war to the entire Gulf region.
