US questions India’s raising MSP for rice despite record harvest, exports, stocks

FILE PHOTO: A logo is seen at the World Trade Organization (WTO) headquarters before a news conference in Geneva, Switzerland, October 5, 2022. REUTERS/Denis Balibouse//File Photo
| Photo Credit:
DENIS BALIBOUSE

The US and Paraguay, in a joint submission at the WTO, have questioned India’s decision to raise Minimum Support Price (MSP) for rice in 2025 despite “record harvests, exports, stocks and offloading of stocks for ethanol production”.

India, on its part, has always argued that its MSP scheme not only supported small and marginal farmers and fed the poor but also kept global prices in check ensuring food security for LDCs and vulnerable countries.

The countries asked India to explain the rationale for increasing the MSP for rice in 2025 while it has been claiming benefits under the ‘Bali Interim Decision’ (that allows WTO subsidy limits to be breached), given India’s record harvests, exports, and stocks exceeding what is necessary to meet domestic food aid needs.

“While the MSP scheme may be part of India’s domestic public food distribution system, the scheme’s effects on exports and disposal of stocks for non-food purposes appear to go far beyond food security,” the US and Paraguay submitted to the Committee of Agriculture. 

The submission will be taken up for detailed discussions at the CoA review meeting on September 25-26, together with other questions from different members about each other’s policies.

Rice exports up

Since India lifted its export restrictions on rice, its rice exports have increased significantly and are expected to rise to a record 22.5 million tonnes in 2025, the submission noted. 

“This has put downward pressure on global rice prices. For example, a Pakistani rice exporter reported prices for non-basmati rice from Pakistan fell approximately $200 per metric ton almost overnight,” it added.

New Delhi maintains that it does not export rice from its procured stocks and that it has been submitting all required information on its overall domestic support notifications. 

The increase in Indian exports is also being fuelled by India harvesting a record 149.1 million tonnes of rice in crop year 2024/25, the submission added. “The FAO estimates this well exceeds India’s demand of 120.7 million tonnes. The FCI is reported to procure approximately one-half of India’s rice crop and had a record 59.5 million tonnes on June 1, 2025. This quantity is more than four times larger than the government’s target of 13.5 million tonnes by July 1. The FCI also announced it was allocating a record 5.2 million tonnes of rice for ethanol production,” the submission observed.

Published on September 11, 2025