Taking the bull by the horns: Finance minister P. Chidambaram in Mumbai on Friday. (Reuters)

New Delhi, March 28: The government is considering a ban on all non-basmati rice exports to arrest rising prices and has withdrawn sops on export of about 50 items to boost domestic supply.

Commerce minister Kamal Nath today said the government was trying to increase supplies of key commodities to check prices. “We are going to recommend scrapping of import duty on steel... The government is looking at a proposal to ban non-basmati rice export,” he said.

Non-basmati rice

The government last evening increased the minimum export price of non-basmati rice by $350 to $1,000 per tonne and that on basmati rice has also been revised to $1,100 from $900 a tonne to discourage exports and increase the availability of the food grain.

“Prices could moderate following these fiscal measures,” Crisil's D.K. Joshi said. “There is no fundamental reason for the prices of these commodities to rise so sharply and I think this could be a short-term phenomenon fuelled by speculative trading,” he said.

Sops on other items

However, commerce secretary G.K. Pillai said the export incentive scheme on other items would continue till the next cabinet decision.

Pillai said, “The duty entitlement pass book (DEPB) scheme would continue till the cabinet takes another view.”

DEPB had been withdrawn for a range of products, including steel, cement, manganese, ferro-chrome and non-basmati rice.

“When there is a shortage (of steel), why give an export incentive? Prices are already very high,” Pillai said. On cement, he said the country was importing cement at zero duty, so it had stopped the export incentives as a precaution.

“An eGoM will meet on April 2 to review prices of rice, wheat and procurement of edible oil,” he said.