INDIA LIFTS RICE EXPORT BAN: WHAT DOES IT MEAN FOR VIETNAM?

After a prolonged period of export restrictions, India—the world’s largest rice supplier—has officially removed its final barrier on rice exports. This development raises a critical question: How will it impact Vietnam’s rice market?

India Officially Returns to the Export Market

Late on March 7 (local time), the Indian government announced the removal of the export ban on 100% broken rice. This decision comes as India’s domestic stockpiles reached record levels in February 2025, far exceeding government reserve targets, coupled with a sharp rise in global import demand. It also marks a significant shift in India’s trade strategy and food security policies.

The resumption of 100% broken rice exports is expected to benefit many African nations by ensuring a more affordable food supply. Additionally, livestock feed producers and ethanol manufacturers in Asia—who rely heavily on this rice variety—will also gain from this decision.

Previously, India imposed a ban on 100% broken rice exports in September 2022. In July 2023, the country extended restrictions to non-basmati white rice exports to stabilize domestic supply and prices. Then, in August 2023, a 20% export tax was imposed on parboiled rice, causing Asian rice prices to surge to a 15-year high, jumping from approximately $450 per ton to $700 per ton for 5% broken rice.

After more than a year of restrictions, on September 28, 2024, India adjusted its policies by lifting the ban on non-basmati white rice exports and reducing export taxes on brown and parboiled rice from 20% to 10%, triggering a downward trend in global rice prices.

Between late 2024 and early 2025, rice prices continued to decline sharply. The price of 5% broken rice from Vietnam and Thailand dropped by 38–45%. In Vietnam, 5% broken rice, which had previously fluctuated between $680 and $700 per ton, has now plummeted to $390–$400 per ton—an unprecedented price drop.

With the full removal of the 100% broken rice export ban on March 7, 2025, India has officially re-entered the global rice export market.

India Officially Returns to the Export Market

Global Rice Market Faces Significant Pressure

Experts predict that with a surge in global rice supply and import demand showing no signs of immediate recovery, the global market will continue to face downward price pressure.

Some analysts even argue that rice prices would have declined regardless of India lifting its ban, due to oversupply across the rice, wheat, and corn markets. Over the next two years, the grain market is expected to remain in surplus, leading to continued low prices.

Will Vietnamese Rice Be Affected?

According to Mr. Đỗ Hà Nam, Vice Chairman of the Vietnam Food Association (VFA), India’s rice exports primarily target low-grade rice markets such as Africa, while Vietnam focuses on premium-quality rice for key markets like the Philippines, Indonesia, and Malaysia.

“Currently, Vietnam’s rice export prices have dropped significantly, making us one of the most competitive suppliers. However, since 80% of our exports are high-quality rice, Vietnam does not directly compete with India’s 100% broken rice. That said, India’s abundant supply could still put pressure on prices, particularly in the low-grade rice segment,” a VFA representative noted.

Similarly, Deputy Minister of Agriculture and Rural Development Phùng Đức Tiến emphasized that Vietnam mainly exports rice to Asian markets such as the Philippines, Indonesia, Malaysia, China, and Singapore, whereas India’s focus is on Africa and the Middle East. Therefore, the two countries serve distinct market segments.

However, India’s return to the export market will increase competition, especially as Vietnam enters its largest harvest season—the Winter-Spring crop. With favorable weather conditions boosting supply, it will be difficult for rice prices to return to $500 per ton as seen in previous years. Exporters must exercise caution in procurement to avoid market volatility risks.

Strategies for Vietnam’s Rice Industry

Given the complex market dynamics, the Ministry of Agriculture and Rural Development has instructed Mekong Delta provinces to follow the Winter-Spring crop schedule and closely monitor saltwater intrusion to ensure stable production.

Additionally, authorities are actively implementing the 1-million-hectare high-quality rice development project in the Mekong Delta, promoting trade opportunities, and exploring new markets to enhance export value.

In the long run, the Ministry proposes a market-driven production model, encouraging businesses to align their supply chains with market demand. Furthermore, local governments need to adjust crop schedules to ensure sustainable profits for both farmers and enterprises.

Moreover, closely monitoring global rice market trends—especially in high-potential regions like the U.S., EU, and Africa—will be crucial in helping Vietnam develop appropriate export strategies and mitigate risks posed by major suppliers like India.

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