Basmati Export: India Catches Pakistan Napping; Moves EU To Get Exclusive GI Tag For Own Variety   

The Narendra Modi government has made a swift move to protect the exclusivity of basmati rice grown in the country in the global export market.

As part of its efforts, it applied to the European Union (EU) for exclusive Geographical Indication (GI) tag for the fragrant, long grain rice, last month. India has applied for the recognition at EU’s official registry, the Council on Quality Schemes for Agricultural Products and Food Stuffs, for the tag.

A GI tag for basmati would mean it is exclusively grown in India or parts of the country.

The move is a significant one since the EU’s revised regulations on fungicides presence in the rice that came into force in 2017-18 resulted in Indian basmati rice losing ground.

Tests had shown that basmati rice from India had higher levels of tricylazole, a pesticide that is sprayed on the paddy to overcome fungal pests. Since the levels could not be brought down, Indian share in the EU basmati market suffered.

This helped Pakistan, which competes with India in the global basmati market, to nearly double its export of the fragrant rice since 2017-18.

A pertinent point here is that Indian basmati has enjoyed a premium position in the global rice market with its prices quoting at least $200 a tonne, higher than Pakistan’s.

Currently, on Alibaba trading website, Indian basmati rice is quoted at around $950-1,000 a tonne against $600-800 quoted by Pakistan shippers. Indian basmati rice enjoys a 65 per cent share in the global export market and Pakistan, the rest.

India has been protective about its basmati rice, even taking on an American firm, which tried to get patents for the variety under Texmati brand in the US, during the late 1990s.

India eventually won its case with the US authorities and since then, followed up with measures to protect its exclusive agricultural products. It was for this purpose that the Geographical Indications of Goods (Registration and Protection) Act, was enacted by India in 1999.

Though basmati is grown in various parts of India, the GI tag for the fragrant, long-grain rice has been assigned to the variety grown only in states such as Himachal Pradesh, Punjab, Haryana, Uttarakhand, outskirts of Delhi, western Uttar Pradesh and parts of Jammu and Kashmir.

In providing the GI tag cover to its basmati rice, the Indian government has resisted attempts by Madhya Pradesh to get a similar tag for a fragrant variety grown in the state. The MP government even moved court but has not been successful until now.

India produces about 7.5 million tonnes (mt) of basmati rice and exports about 4.5 mt annually. During 2019-20, India earned Rs 34,000 crore shipping 4.45 mt basmati rice.

Basmati exports have stagnated at this level for quite some time. The EU regulations on pesticide have, in a way, affected the growth in its exports.

The Indian move comes at a time when two contrasting developments have taken place.

One, basmati exports witnessed a 10 per cent rise during April-June this year. They earned about Rs 8,600 crore, making up one-third of the country’s agricultural exports during the period.

On the other hand, exports to Iran, a major buyer of Indian basmati rice importing some 1.5 mt annually, have suffered on account of the US sanctions against it. Right now, some quantity of Indian basmati rice reaches Iran's shores indirectly.

The US sanctions have prevented India from buying crude oil from Iran and this, in turn, has affected basmati exports. This has benefitted Pakistan as a result.

The Indian move to get the GI tag from the EU comes amidst these developments. According to EU rules, competing nations have three months’ time to contest the claim.

With over two weeks having already passed after the notification of Indian claim, the neighbouring country has less than 10 weeks now to respond. The problem for the Imran Khan-led government is that it has not assigned any geographical territory for its basmati rice cultivation.

Basmati rice in Pakistan is grown mainly in its Punjab province and its cultivation has extended to Sindh and Balochistan provinces. Within Punjab, the traditional areas are lagging behind in production.

The cultivation of basmati rice in provinces other than Pakistan’s Punjab has diluted the exclusivity of the fragrant rice’s geographical territory. If Pakistan takes measures to demarcate the geographical exclusivity of the rice, then it would be up against regional politics from the Sindh politicians, in particular.

Thus, it will be a tough ask for Pakistan to rush through the process of demarcating areas for its basmati cultivation within the short span.

Pakistan has to prove to EU that it has been maintaining exclusivity of its regions cultivating basmati. This also means hours will have to be spent on talks and negotiations.

But given the fact that the EU is upset with China and its allies such as Pakistan after the novel coronavirus breakout since it holds Beijing responsible for this, the Imran Khan government has the onerous task of convincing it.

With the Indian government now planning to ban pesticides such as Tricyclazole and Buprofezin, which led to trade dispute with importing nations, the basmati rice industry has more reasons to cheer.