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MSP hike India accounts for almost one-third of the global rice trade and so far, it has exported around 14 million tonnes of rice in the current year. Although MSP covers just normal rice, it will push up price of basmati rice as well, exporters claim. Sethia said that the higher assured price under MSP for paddy will encourage farmers to grow normal rice instead of basmati from next year in the country. “The price of basmati will have to increase or farmers will lose interest in growing the premium rice,” Sethia said. Traders of cotton, another major export commodity, said that the MSP will check cotton exports from India and ensure domestic supply during current season. “The substantial increase in the price of cotton is expected to activate multi- national companies in domestic market as exports of raw cotton will be unviable now,” cotton trader said. India is leading global trader in rice with exports over 12 million tonnes including 4 million tonnes of basmati rice from the country. “With exports likely to dampen, the Cotton traders including multi-national firms are expected to remain active in domestic market,” an analyst said. Exporters of cotton yarn and textile from India expressed concern over losing low cost advantage in raw cotton as cotton prices had remained subdued in the last few months compared to global market. “Government could benefit farmers by directly paying the difference of amount between MSP and market price,” IJ Dhuria, director, (raw materials) Vardhman Textiles said.He said that the hike would distort market for yarn and textile industry. Farm activists find the MSP short of expectation.

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