The Welfare Impact of India’s Rice Tariff from a Global Perspective <br/>—Research on Computable Local Equilibrium Model

Abstract

Based on the literature of Francois and Hall (1997, 2003, 2007) , this article constructs a computable partial equilibrium model and data on rice pro duction and trade in countries related to India’s rice export tariffs in 2022. The empirical analysis is conducted from the industry level on the impact of India’s rice export tariffs on rice trade, production, prices, and producer and consumer welfare in relevant countries or regions. The following conclusions are drawn: Firstly, the trade disruption effect of India’s imposition of rice export tariffs is significant, with exports to other countries (regions) decreasing by over 80%; Secondly, the imposition of rice export tariffs by India has only increased consumer prices for rice in India and China by 7.9% and 3.9%, and the cost of export tariffs will be borne by importers; Thirdly, imposing rice export tariffs in India does not provide substantive protection for Indian rice consumers, as the price of Indian rice consumers has increased by 7.9%; Fourthly, from the perspective of social net welfare indicators, India’s imposition of rice export tariffs resulted in an increase of $471 million in India’s social net welfare and a loss of $93.1 million in China’s social net welfare. However, from the perspective of individual group welfare, Indian rice producers and consumers will become the biggest victims, losing $7.04 billion and $4.10 billion , respectively ; Fifthly, looking at the entire data, India’s imposition of rice export tariffs has a relatively small impact on China’s rice supply and consumption, with only 3.9% change in prices for both Chinese producers and consumers.