Summary: Following an increase in paddy prices and policy changes on rice exports in India, rice prices in Nepal have surged by NPR 300 to 400 per quintal over the past two months. The Nepal Rice, Oil, and Pulses Industry Association attributes the rise mainly to India opening rice export quotas for Bangladesh and a shortfall in production. With the Indian government raising the minimum support price for paddy, traders predict that by Dashain festival, rice prices in Nepal could climb by an additional NPR 100 to 200 per sack.
Kathmandu, 17 Ashar — Rice prices in Nepali markets have escalated noticeably, affecting both wholesale industries and retail outlets. Within just two months, the price for a 25 kg sack has increased by NPR 300 to 400, according to industry insiders. Manufacturers and traders cite India’s modifications in rice export policies, seasonal production declines, and increases in minimum support prices for paddy as the main drivers of the price hike. Because Nepal is entirely dependent on imports, price changes in international markets—especially in India—have a direct impact on the country’s rice cost.
Vibhor Agrawal, a member of the Nepal Rice, Oil, and Pulses Industry Association, explained that India’s policy shifts have influenced the rise in rice prices. “Our country depends on imports due to insufficient domestic paddy production,” Agrawal stated. “India has also opened rice export quotas to Bangladesh. Seasonal factors have reduced paddy production in India, causing a significant spike in the prices of both paddy and rice.” Most rice varieties currently available have seen price increases. Two months ago, the price of Jeera Masino paddy was NPR 2,600 per quintal in India; now it has surged to NPR 3,200. Correspondingly, the 25 kg sack of Jeera Masino rice has risen from NPR 1,800–1,900 to NPR 2,300–2,400. Similarly, Sona Mansuli paddy, previously NPR 3,100–3,200 per quintal, has reached NPR 3,600–3,700, with rice prices moving from NPR 1,350 to NPR 1,600 per 25 kg sack, Agrawal added.
The price of 20 kg Long Grain (Basmati) rice has climbed to NPR 3,400–3,500, while 1,125 NPR priced 1442 paddy rice has increased to NPR 1,250. Agrawal noted that large dealers purchase directly from mills, so although price hikes affect them immediately, retail traders with existing stock might take some time to pass on the changes to consumers. Retailers have also indicated that since mills have raised their prices, they are compelled to increase retail prices accordingly. Officials said that mill and wholesale prices have risen by up to NPR 300 per sack, and with added transport costs, rice has become more expensive.
Manoj Dangal, owner of a food market in New Baneshwor, observed price increases across all food grains, with rice seeing substantial growth. “Prices for all types of rice have risen by NPR 350 to 400 per sack; even common rice now costs around NPR 100 per kilogram,” Dangal said. Traders report that continuous price hikes are making daily living difficult for the general public, affecting retail trade and household food expenses directly. “Currently, the market is sluggish, and business has slowed down. Consumers have stopped purchasing non-essential items,” Dangal added.
The Nepal Food Grocery and Wholesale Traders Association also reported that demand and prices have increased following the reopening of Indian export quotas. According to association president Devendra Bhakta Shrestha, the rise in prices in the Indian market has directly affected Nepal’s rice prices. “The surge in paddy prices in India is the main reason for the increase in our market,” Shrestha said. Domestic rice production in Nepal cannot meet demand, making the market reliant on Indian prices. The market trends are largely influenced by prices in India, he noted.
India is the world’s largest exporter of rice, supplying over 140 countries. Its principal export destinations include Middle Eastern countries such as Saudi Arabia, Iran, and Iraq, as well as neighboring nations like Nepal, Bangladesh, and various African countries. Bangladesh has prioritized importing more rice from India to control domestic prices and enhance food reserves. In January 2026, the Bangladeshi government granted 232 private importers new quotas allowing them to import an additional 200,000 metric tons of rice. These imports must be completed by March and are part of a larger plan to import 900,000 metric tons in the fiscal year 2025-26 as compensation for flood and weather-related damages.
Bangladesh has reduced or waived customs and other import duties, facilitating easier and cheaper import processes. This adjustment provides Indian rice producers and exporters with significant opportunities to expand their market share in Bangladesh, according to media reports.
Have paddy and rice prices increased in India? Indian media confirm that both paddy prices received by farmers and rice prices paid by consumers have risen. The Indian Cabinet has approved an increase in the minimum support prices for 14 crops, including paddy, for the 2026/27 agricultural year, officially raising paddy prices to provide relief to farmers.
Government announcements and official news outlets reported that the procurement price for normal paddy has increased by INR 72 per quintal to INR 2,441. Similarly, “Grade-A” paddy prices have been raised by INR 72 to INR 2,461 per quintal. This hike ensures that farmers receive at least 50 percent more than production costs and is estimated to result in government payments totaling around INR 2.6 trillion.
Alongside the government price support increases, local Indian markets have experienced abnormal spikes in rice prices. According to the mandi report dated 29 June 2026, rice prices jumped by 37.43% in a single day. Key factors driving price increases include rising production costs and weather uncertainties. Higher labor shortages, along with rising fuel and fertilizer costs, have played major roles in increasing cultivation expenses. Additionally, delayed monsoons and concerns related to the El Niño phenomenon have raised fears of reduced output, further pushing up market prices. Strong demand for Indian rice in international, Asian, and African markets has also prevented prices from declining.
The Indian government’s overall food grain procurement, storage, and distribution costs have also escalated. Continuous increases in minimum prices coupled with expensive transportation and financing costs are expected to push the government’s rice procurement cost to about INR 4,391 per quintal for 2026-27. While the new price policies benefit paddy farmers, the steep rise in rice prices in the Indian market has increased costs for everyday consumers.
Due to rising paddy prices and supply concerns in India, traders and industry representatives forecast further increases in Nepali rice prices up to the Dashain festival. Industry member Agrawal stated, “By Dashain, rice prices per sack could increase by at least NPR 100 to 200. We are compelled to sell at prices aligned with India’s market.” The association has written to Nepal’s Agriculture Ministry concerning the price surge, but has yet to receive a response, according to complaints from industry stakeholders.
