India’s Rice Export Boom and the Groundwater Crisis

Paper: GS – III, Subject: Economy, Topic: Agriculture, Issue: Rice Production – Impact on Groundwater.

Context:

India’s dominance in global rice trade accounting for about 40% of world rice exports is intensifying a looming groundwater crisis, especially in water-stressed States like Punjab and Haryana, where rice cultivation is rapidly depleting aquifers.

Key Takeaways:

Background:

• India overtook China in 2023 to become the world’s largest rice producer.
• Rice exports have nearly doubled over the last decade, crossing 20 million tonnes annually.
• This export-led growth has been supported by Minimum Support Price (MSP) and power subsidies, encouraging water-intensive rice cultivation even in ecologically unsuitable regions.

Core Issue: Rice–Water Paradox:

• Rice requires 3,000–5,000 litres of water per kg, making it highly groundwater-intensive.
• In Punjab & Haryana:
  • Groundwater depth has fallen from 30–50 feet to 80–200 feet.
  • Many districts are officially classified as “over-exploited” or “critical” aquifers.
• Despite strong monsoons in recent years, aquifer recharge remains inadequate due to excessive extraction.

Key Drivers:

1. Policy Distortions:
   1. MSP for rice has risen by ~70% over the past decade.
   1. Free or subsidised electricity incentivises uncontrolled groundwater pumping.
2. Export Push:
   1. India produces far more rice than required for domestic consumption.
   1. Global food security dependence on Indian rice limits export restrictions.
3. Weak Crop Diversification:
   1. Alternative crops (millets, pulses) receive short-term and insufficient incentives.
   1. Market assurance for non-rice crops remains poor.

Implications of Depletion:

Government Response & Gaps:

• States like Haryana have offered incentives (₹7,500/ha) to shift to millets.
• However:
  • Incentives are short-term and seasonal.
  • No assured procurement comparable to rice.
  • Past farm law reforms attempting diversification faced political resistance.

Way Forward:

• Rationalise MSP and power subsidies to reflect water scarcity.
• Promote crop diversification with long-term price assurance.
• Shift procurement towards millets and pulses (nutrition + water efficiency).
• Strengthen groundwater governance under the Atal Bhujal Yojana.
• Align trade policy with ecological sustainability, not just export competitiveness.

India’s rice export success hides a deepening groundwater crisis, driven by subsidies and water-intensive farming, demanding sustained policy reforms, crop diversification, and long-term incentives for environmentally sustainable agriculture.

https://www.thehindubusinessline.com/economy/agri-business/indias-domination-of-global-rice-trade-stokes-looming-water-crisis/article70451821.ece

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