New Delhi, May 18: The Federation of Indian Chambers of Commerce and Industry (Ficci) has asked the government to roll back its decision to impose an export duty of $200 per tonne on basmati rice.

In a letter to Prime Minister Manmohan Singh, Ficci said this step would hinder India’s competitiveness in the export market.

The tax and a minimum export price imposed on basmati would hardly help to curb inflation, the industry body said.

Apart from the duty, the government had brought down the minimum export price to $1,000. Such a low level of minimum price, which is below the ex-factory price, runs the risk of becoming the reference or benchmark price in export.

A number of importers may demand a cut in the export price of basmati rice in line with the proposed minimum price.

Ficci said the proposed minimum price was likely to stall the export of basmati rice by introducing more complications in buyer-seller relationships.

“The top priority of the government is to raise farm income,” Ficci said. The imposition of the export tax will give the impression that the government is increasing its revenues at the expense of farmers.

A study by Ficci stated that the consumption of rice in India was around 89 million tonnes, of which basmati comprised just 0.2 per cent.