India’s Rice Mountain: How Can the World’s Biggest Producer Turn Surplus Into Strategy?

India’s record rice surplus is straining storage and prompting a push for new export opportunities. While production and global share are soaring, weak demand, strong competition, and earlier export bans pose challenges. Exporters aim to enter premium markets like Japan and Southeast Asia by improving quality and supply chains. Success hinges on shifting from volume to high‑value, consistent rice exports.

India is staring at an unusual problem for an agriculture-driven economy — far too much rice. After several consecutive bumper harvests and record procurement, government warehouses are overflowing. For exporters, this abundance poses a pivotal question: can India transform excess output into global opportunity by entering new markets and consistently supplying premium-quality rice?

Chasing New Markets, Starting With Japan

Japan has long been regarded as a near-impenetrable market for foreign rice, given its deep cultural attachment to local varieties that command prices far above Indian staples. Still, Indian exporters continue to knock at the door.

The Indian Rice Exporters’ Federation, in partnership with the International Rice Research Institute and APEDA, is studying which Indian varieties can be adapted to Japanese cooking styles. At the Bharat International Rice Conference in October, exporters demonstrated how Assam’s fragrant Joha rice could be used in sushi — a small but symbolic step toward shifting perceptions.

But winning Japan’s confidence is a long-term project. According to Dev Garg, vice-president of IREF and director at Shri Lal Mahal Group, the challenge is twofold: building trust in Indian rice as a reliable substitute and ensuring supply chains are strong enough to deliver consistent quality. The company has already mapped over two dozen global cuisines and markets that could potentially adopt India’s diverse rice varieties.

With mounting reserves at home, the incentive to unlock such opportunities has never been stronger.

Production at Full Throttle

India produced roughly 150 million tonnes of rice in 2024–25, covering close to 47 million hectares and accounting for nearly a third of global output. Exports have climbed to over 20 million tonnes, representing 40% of the global rice trade.

The surge is no accident. Over the past decade, production has risen steadily. Improved irrigation means monsoon fluctuations now have less impact on yields. States like Odisha and Telangana have expanded cultivation rapidly, while Chhattisgarh’s high minimum support price has made paddy a low-risk crop for farmers.

New seed varieties such as 1509 rice are also boosting productivity while consuming less water, bringing non-basmati yields closer to basmati levels.

India has now overtaken China as the world’s top rice producer — but with that achievement comes an enormous stockpile.

The Burden of Surplus

Two years ago, India restricted exports of several rice categories to secure domestic supply amid fears of a weak monsoon. However, heavy rains in 2024 reversed the situation entirely. The government lifted those export bans, but by then, grain had already begun piling up.

By early November, rice stocks had ballooned to around 50 million tonnes — quadruple the buffer norm. With new procurement underway, total reserves could approach 96 million tonnes in the coming months.

Even with the Public Distribution System releasing roughly 3.5 million tonnes monthly, analysts expect India to carry more rice into 2025 than its storage and distribution systems can comfortably manage.

Growing rice is no longer the challenge — finding space and buyers is.

Export Growth Meets Global Headwinds

India already dominates the global rice trade, but pushing exports from 20–22 million tonnes to around 30 million tonnes in FY26 will be difficult.

African nations are the main buyers of non-basmati rice, while basmati shipments largely go to the Middle East. Yet India’s temporary export bans created uncertainty among buyers, many of whom diversified their sourcing.

Adding to the pressure, other major producers such as Thailand, Vietnam, Myanmar, and Pakistan have enjoyed strong harvests as well. Global prices have dropped sharply — Indian par-boiled rice that fetched over USD550 per tonne early in the year now sells closer to USD340. Major buyers like the Philippines and Indonesia are also sitting on comfortable inventories, muting demand.

In short, India faces crowded markets, falling prices, and cautious buyers.

Navigating Intense Competition

India competes directly with Pakistan for both basmati and non-basmati exports. Thailand remains a top supplier of par-boiled rice and often commands a quality premium, though that gap has narrowed. In parts of West Africa, Indian shipments have begun replacing Thai volumes — a promising trend, but one that requires consistent quality improvements to sustain.

Exporters see openings, but every gain requires effort in an increasingly competitive field.

The Quality Imperative

India’s surplus offers a structural opportunity: upgrade rice quality and capture premium markets rather than relying on sheer volume.

Vietnam is an example of what’s possible. In recent years, it shifted from mostly low-grade exports to a portfolio dominated by high-quality fragrant varieties, earning a sizable price premium. Markets in Southeast Asia — particularly Indonesia, the Philippines, and Malaysia — pay well for polished, long-grain varieties with minimal broken rice content. India’s share in these markets remains low.

Momentum may be building. Telangana recently shipped its first large consignment to the Philippines, signaling potential diversification in sourcing. But to secure lasting access, India must improve milling standards, reduce breakage, and ensure consistency — qualities these markets prize.

Consumer preferences, however, change slowly. Populations accustomed to Thai rice will not switch overnight.

Still, industry players like Nitin Gupta of Olam Agri believe exporters who stay committed to quality and reliability will reap long-term rewards.

The Road Ahead

India’s rice sector stands at a crossroads. The country has more rice than it can store, sell domestically, or comfortably manage. But this excess also presents a rare opening: a chance to reposition India as a supplier of consistently high-quality rice to premium international markets.

The path forward will demand patience, investment in better milling and supply chains, and a strategic shift toward value rather than volume. The global market is crowded and price-sensitive, but India’s scale and diversity give it a unique advantage.

If exporters can marry quality with reliability, the world’s largest rice producer may turn its surplus into a sustainable global edge — grain by grain.