Trade Directions of Indian Basmati Rice Export- Markov Chain Approach

Abstract

This study aimed to measure the changes in the export direction of Indian basmati rice from 2009-10 to 2021-22 using the Markov chain approach. The data used in the study was obtained from APEDA as secondary time series data. The study found that the export of Indian basmati rice increased in quantity over the study period due to strong demand in the international market, comfortable domestic production, and favorable government policies. Iran and Iraq showed the highest growth rate in both quantity and value of export, while UAE had higher instability in both terms. The study also revealed that UAE and Saudi Arabia were the most stable and reliable markets for Indian basmati Rice, with a probability retention of 76.17 percent and 55.64 percent, respectively. On the other hand, the UK was an unstable market with zero probability of retention. The projected share of different importing countries up to 2027-28 indicated that Iraq and Iran would likely lose their share in the coming years, while UAE, Kuwait, and Saudi Arabia are expected to increase their share in the future. Additionally, the study showed that the export of basmati rice increased over the study period and is a competitive export product. To have a competitive advantage in the export of basmati rice, the government should focus on improving processing facilities, transportation facilities, handling and loading facilities at ports, and quality maintenance to facilitate the export of Indian basmati rice.