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Paper 4 – Impact of Indian Policies on Rice Price in Bangladesh

Contributors: Selim Raihan and Towfiqul Islam Khan

Publication Period: January 2013

Considering the experiences in 2007-2008 as a reference point, the present paper estimates the macroeconomic and welfare impact of Indian rice export policies for Bangladesh using GTAP and CGE models. The study suggests that rice export ban by India had negative impacts on Bangladesh in terms of loss of welfare, decline in real GDP, decline in exports and imports, and rise in CPI. However, the margins of direct impacts were rather small. Also, majority of the households in the rural and urban areas experienced some fall in real consumption. This is a reflection of the fact that in recent years, Bangladesh has become less dependent on imported rice. However, the study also concludes that India, historically the primary source of imported rice for Bangladesh, can no longer be considered dependable.

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