Bilateral Trade Welfare Impacts of India's Export Ban of Non-Basmati Rice Using the Global Partial Equilibrium...

Area of Science:

• Agricultural Economics
• International Trade Policy
• Global Market Simulation

Background:

• India, a leading rice exporter, imposed a ban on non-Basmati white rice exports, affecting 25% of its exports and 10% of global trade.
• The export ban aimed to stabilize domestic prices and ensure availability for Indian consumers.
• Global rice market accessibility, consumers, and producers in twelve regions were impacted by this trade restriction.

Purpose of the Study:

• To analyze the economic effects of India's non-Basmati white rice export ban.
• To assess the impact of trade restrictions on global welfare, trade values, and market surpluses.
• To evaluate the influence of potential tariff reductions by importing countries on mitigating losses.

Main Methods:

• Utilized the Global Simulation Model (GSIM) to simulate trade policy changes.
• Employed national product differentiation to model trade impacts at various scales.
• Examined effects on importer and exporter trade values, tariff revenues, and market surpluses.

Main Results:

• India's export ban resulted in a higher local price and a global net welfare loss of USD 1.7 billion.
• Welfare losses decreased to USD 1.4 billion with a 25% import tariff reduction and USD 1.1 billion with a 75% reduction.
• Sub-Saharan Africa, the Middle East, North Africa, and GCC regions experienced the most significant negative impacts.

Conclusions:

• India's non-Basmati rice export ban created substantial global economic welfare losses.
• Importing countries' tariff adjustments can partially offset the negative welfare impacts of such trade restrictions.
• The study highlights the interconnectedness of global food markets and the far-reaching consequences of major exporters' trade policies.