This paper tests for market integration in 55 wholesale rice markets in India using monthly data over the period January 1970 â?? December 1999. The technique of Gonzalez-Rivera and Helfand (2001) is used to identify common factors across various markets. It is found that wholesale rice markets are considerably fragmented. A major reason for this is the excessive interference in rice markets by government agencies and barriers to internal trade. As a result it is hard for scarcity conditions in isolated markets to be picked up by markets with abundance in supply. A number of policy implications are also considered.