India, Pakistan clash in European Union over GI tag for Basmati

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The long-grained aromatic Basmati rice, grown in the foothills of the Himalayas and in the Indo-Gangetic belt and in some areas of Pakistan, finds the itself in the thick of a stormy tussle between the two neighbours over the right to protected geographical identification (PGI) trademark in the European Union.

“In 2018, India had filed for the registration of basmati PGI in EU. And as per the procedure the filing was placed in public domain inviting comments till 30.09.2020. The comments received are presently under evaluation,” says Vinod Kaul, executive director of All India Rice Exporters Association (AIREA).

India’s move, however, miffed Pakistan greatly.  It was perceived to be a hammer blow to Pakistani traders in a critical export market.

The two countries are the only global exporters of basmati rice. About two-thirds of basmati imports to the EU are from India and the rest from Pakistan.

However, according to Kaul, at this stage, it is too premature to make any value judgement or impact on exports of any country.

Tricky situation

The impasse began since September 2020, when the European Commission published the application for registration of the name ‘basmati’ from India as a proposed PGI indicator.

If granted, analysts believe India would have domination over basmati rice markets in Europe, as names of products registered as GIs are legally protected against imitation and misuse within the EU and in non-EU countries where a specific protection agreement has been signed.

Pakistan has been vehemently opposed to India’s move. It filed a counter-petition in late 2020. In February 2021, the Rice Exporters Association of Pakistan (REAP) submitted a notice of opposition to the EU over India’s claim on Basmati according to Pakistan’s leading daily, Dawn. 

Earlier in the year, as the law requires, before registering any product in the international market it has to be GI protected in that country, Pakistan got the GI tag for its Basmati, which it previously did not have.

Historically speaking, Basmati rice has been cultivated on both sides of the border for centuries. It is a favoured staple in both countries’ cuisine.  

India is the largest rice exporter in the world. According to the commerce ministry and All India Rice Exporters Association data, India exported $245.4 million worth of basmati rice to the EU in 2020-21 as against $207 million in 2019-20. In quantitative terms, it was 2.88 lakh tonnes compared to 2.11 lakh tonnes the previous year.

Similarly, Pakistan exports between 5-7 lakh tonnes of basmati rice to the world, of which 2-2.5 lakh tonnes is shipped to EU countries.

“This year India recorded a 3.96 percent increase in export of Basmati rice over 2019-20 touching a figure of 4.6 million tonnes,” says Kaul.

However, India’s export of basmati rice has been shrinking owing to a failure of its producers to meet increasingly strict EU standards on the use of pesticides. A major proportion of Indian basmati exports go to Iran, Saudi Arabia and other countries in the Middle East, as it is best suited to their food habits. That demand will continue to increase.

On the other hand, Pakistan’s export of basmati rice to the EU has more than doubled in the last three years, from 120,000 metric tons in 2017 to 300,000 metric tons in 2019, according to the European Commission.

Getting past the logjam

As the matter involves the livelihood of farmers on both sides of the border since it is a major source of revenue generation for both countries, an amicable resolution to the standoff would be the best outcome.

The EC would also favour that.

Industry watchers say that exporters of basmati rice in both countries would prefer a joint claim over the trademark, especially as it is a joint heritage. It is being mooted as a solution as Pakistan is also entitled to secure its basmati rice trade as much as India.

A spokesperson of Punjab Rice Millers Export Association also suggested that because India and Pakistan are the only two countries which produce basmati in the world, they should both jointly work together to save the heritage and protect the GI regime of the rice

Besides, analysts also claim that both countries have been exporting and competing in different markets for more than four decades and PGI is unlikely to change that. Also Pakistan securing the GI tag for its Basmati rice would in no way, dent India’s Basmati exports.

However, Kaul says: “There is no such move present for the joint claim”.  

Till then it will have to wait and watch for the moment. 

Shampa Bahadur has been a business journalist for more than two decades. She has written for Business India, PTI Media TransAsia and India Infrastructure Publication Ltd among others. She has also written coffee table books. She can be reached at shampa@indoasiancommodities.in

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