NEW DELHI, Nov 25: India may review its export tax on basmati rice and allow overseas sales at a lower price as it is losing market share to Pakistan, a trade official said on Tuesday.

India in April imposed an export duty of $200 on a ton of basmati rice and raised the minimum price for export to $1,200 per ton, reacting to rising prices and dwindling stocks.

Pakistan, which also produces aromatic basmati, has cashed in on the moves, the executive director of the All India Rice Exporters’ Association, Anil Adlakha told Reuters.

“Realising that Pakistan is selling at just half the price, we wrote to the government to remove export duty and lower the minimum export prices,” he said. The government is ready to discuss the two issues.

India in September allowed exports of pusa-1121, a premium non-basmati rice and later included the variety in the basmati branded category.

About 15 days ago, Pakistan’s super brand of premium rice was priced at about $850 per ton, against $1,650 per ton for India’s pusa-1121, Rajeev Setia, a leading exporter, said.

“We are going to lose out to Pakistan in a big way. Just wait for three to four months,” he said.

The country exported 5.5 million tons of rice in the year to March 2008, up from 3.8 million tons the year before.

India, which also banned exports of non-basmati rice in April to stave off shortages in domestic markets, recently allowed two firms to ship 12,500 tons, but analysts said it should not be seen as a move to gradually relax the ban.

Adlakha said the export ban on basmati rice would not help the poor as few consumed these superior varieties.

“On the other hand, there would be some loss of foreign exchange for the country,” he said, adding comfortable rice stocks should allay fears of domestic shortages.

Analysts say Pakistan, the world’s fifth-largest rice exporter, has become more price competitive than India due to a bumper rice crop and depreciation of the Pakistani rupee against the dollar. —Reuters