In a significant enforcement action, the Customs Department has levied fines on two firms involved in exporting regular rice under the guise of organic rice. Both companies, which had falsely declared the rice as organic, face substantial penalties. One firm has been fined Rs 95 lakh, and the other Rs 65 lakh,

with the caveat that these amounts must be paid promptly to avoid seizure of their rice consignments—25,500 tonnes and 16,700 tonnes, respectively.

The fines stem from a series of irregularities: the exporters falsely claimed to be exporting organic rice when, in fact, they were shipping non-basmati white rice, which had been banned for export as of July 2023.

The mislabeling of the rice, along with the fact that the export of white rice was prohibited during that period, led to the fines. Additionally, the firms have been charged Rs 75 lakh for providing misleading information regarding the nature of the rice they were exporting.

The exporters also face significant financial consequences, having already incurred Rs 17 lakh per day in detention and demurrage charges for the cargo while the case was being investigated. The Customs Department's fine aims to recover these costs as well as penalize the companies for the fraudulent actions.

Industry experts have voiced concerns that the fines are insufficient, calling the case an example of "fraud" and urging more stringent action to prevent similar violations in the future. While the government has since allowed the duty-free export of white and sela rice, this particular incident occurred when the export of non-basmati white rice was still prohibited, in effect from July 2023 through September 2024.

This case highlights the ongoing efforts of Indian authorities to monitor and regulate rice exports, ensuring that companies adhere to strict guidelines, especially in the wake of export bans.