{"id":12011,"date":"2023-12-13T17:01:30","date_gmt":"2023-12-13T17:01:30","guid":{"rendered":"https:\/\/ricenewstoday.com\/?p=12011"},"modified":"2023-12-13T17:02:02","modified_gmt":"2023-12-13T17:02:02","slug":"set-to-sign-fta-with-india-and-give-basmati-gi-tag-eu-plans-to-protect-domestic-rice-industry","status":"publish","type":"post","link":"https:\/\/ricenewstoday.com\/dev\/set-to-sign-fta-with-india-and-give-basmati-gi-tag-eu-plans-to-protect-domestic-rice-industry\/","title":{"rendered":"Set to sign FTA with India and give basmati GI tag, EU plans to protect domestic rice industry\u00a0"},"content":{"rendered":"\n

Proposes to impose barriers to new players in market, hike security deposit for default<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The GI tag given to basmati rice by the Indian authority recognises Punjab, Haryana, Uttar Pradesh, Himachal Pradesh, Uttarakhand, Jammu and Kashmir and Delhi as the growing regions | Photo Credit: KAMAL NARANG<\/p>\n\n\n\n

The European Union has come up with a set of proposals to protect its domestic rice players even as it prepares to provide a Geographical Indicator (GI) tag for Indian basmati rice and signing a free trade agreement (FTA) with New Delhi, documents viewed by\u00a0businessline\u00a0<\/em>show.<\/p>\n\n\n\n

The proposals include repealing regulations for the import of basmati rice, increasing security deposit, electronic invoicing, e-authentication, and online consumer protection. Two major European players who will likely benefit from these are Spanish firm Ebro Foods, which owns the premium basmati rice brand Tilda, and Italian firm Euricom.<\/p>\n\n\n\n

The proposals have been submitted by the European Commission to the EU Council, and it is expected to be ratified and implemented. One of the proposals is Article 4, which erects a barrier to any new basmati player who has to obtain an import licence after acquiring two years of experience in rice.<\/p>\n\n\n\n

Preventive clause<\/h5>\n\n\n\n

European millers mainly import husked basmati rice, and over the past two decades, the European rice milling industry and brands have consolidated. Once basmati rice gets protected GI (PGI) from the EU \u2014 the application has been pending since July 2018 \u2014 a branded basmati player from India intending to set up a mill to avail of the zero import duty concession will have to wait.<\/p>\n\n\n\n

This means that if an Indian firm buys a mill in Europe, it will lose its market and margin in view of the two-year mandatory waiting period.<\/p>\n\n\n\n

Article 5 of the proposed regulation bars transferring import licence among traders. \u201cEven if an Indian company technically takes over an experienced trading company, its experience is under question. Article 5 is a preventive clause to ensure that Article 4 is not circumvented,\u201d said S Chandrasekaran, a GI expert who has authored the book \u201cBasmati Rice: The Natural History Geographical Indication.\u201d<\/p>\n\n\n\n

EU industry fears<\/h5>\n\n\n\n

The initiative is aimed at protecting European domestic mills and European basmati rice brands. Perhaps, Chandrasekaran said, the European industry fears that leading and famous Indian brands will enter the European Union after the EU signs an FTA with India and PGI for the fragrant rice is registered there. The gestation period is a primary protection for European Basmati players.<\/p>\n\n\n\n

\u201cThe European Commission move is to preserve the status quo<\/em> of local players and brands in the mainland Europe basmati market.  This signals the serious intent of the European Commission in protecting its domestic interests, which also indicates the gaps and vulnerability,\u201d the GI expert said.<\/p>\n\n\n\n

Having said that, he said, beneficiaries of this policy bring traces of trans-Atlantic history in terms of trade. \u201cIndia needs to prioritise its focus and intent in the FTA and GI agreement with the EU in view of overall national interest instead of mere commercial interests,\u201d Chandrasekaran said.<\/p>\n\n\n\n

Head note 7 features<\/h5>\n\n\n\n

The proposals\u2019 history is traced to the 1992 Dunkel pact, when the EU, in a pact with the US, agreed to insert in the GATT (General Agreement on Tariffs and Trade) schedule a special \u201cHead note 7\u201d for rice, resulting in a ceiling price for imported husked rice.<\/p>\n\n\n\n

This ceiling for Japonica rice was 188 per cent of the intervention price for paddy, while for Indica rice it was 180 per cent of the intervention price, both irrespective of the price or quality of the rice concerned.<\/p>\n\n\n\n

This led to higher prices for rice being levied a lower duty. As per \u201cHead note 7,\u201d the EU would impose duty on rice imports if a consignment\u2019s price was higher than the union\u2019s ceiling price.<\/p>\n\n\n\n

Since basmati rice prices (aromatic Indica rice from India and Pakistan) were on average \u20ac250\/tonne higher than the world market reference prices to be used for calculating the duty, a special abatement of an equivalent amount had to be granted to this rice. As a result, basmati imports increased from about 40 000 tonnes in 1994\u201395 to 100,000 tonnes in 1998\u201399, entering at low or zero duty.<\/p>\n\n\n\n

Basmati escapes notice<\/h5>\n\n\n\n

Due to this ceiling, between July 1995 and February 2000, the applied import duty for husked Indica rice came down from around \u20ac390 a tonne to around \u20ac200. This was \u20ac89 below the agreed fixed tariff for 1999\u20132000.<\/p>\n\n\n\n

Then, the EU did not notice the fact that Basmati rice was priced higher than its ceiling price. With the implementation of the General Agreement on Tariffs and Trade (GATT) and the Uruguay round of the World Trade Organisation (WTO), the path was paved for basmati rice to enter the community at zero import duty.<\/p>\n\n\n\n

The EU also imposed \u20ac264 a tonne as duty on basmati rice from India and Pakistan but listed eight varieties of the long-grained rice for zero duty. These included Pakistan\u2019s Super Basmati, allowed after prolonged discussions, and India\u2019s Pusa Basmati.<\/p>\n\n\n\n

Increasing shipping risks<\/h5>\n\n\n\n

Another proposal is the increase mooted in the security deposit for any consignments entering the EU. Till now, it has been collecting a deposit of \u20ac30 per tonne. This is now being raised to \u20ac70, which increases the risk of the sub-continents losing money in case of a forfeiture.<\/p>\n\n\n\n

The risk of forfeiture will increase as the EU will be digitising even non-customs formalities of shipments from 2025. The forfeiture may be for any adulteration or wrong authenticity of the fragrant rice.<\/p>\n\n\n\n

\u201cThe Commission intends to digitise the whole process by establishing an electronic system for DG AGRI non-customs formalities (ELAN) based on TRACES.NT and linked to the EU Single Window Environment for customs \u2026 ELAN will define the digital processes in the future and will allow users to issue, store, and retrieve the necessary documents\u2026 After defining those digital processes, the legal provisions of the two Regulations will be amended accordingly,\u201d the EU Council said in its proposal.<\/p>\n\n\n\n

Issue of M.P. rice<\/h5>\n\n\n\n

This provision will bring in traceability of rice right from the farm where it is cultivated. This will create problems with regard to the GI tag for Indian basmati rice.<\/p>\n\n\n\n

The GI tag given to basmati rice by the Indian authority recognises Punjab, Haryana, Uttar Pradesh, Himachal Pradesh, Uttarakhand, Jammu and Kashmir and Delhi as the growing regions. However, the fragrant rice grown in these regions sometimes runs into pesticide residue issues.<\/p>\n\n\n\n

So, many exporters are sourcing basmati rice from Madhya Pradesh, which is not recognised as a growing region; the State\u2019s case for GI tag is pending with the Supreme Court. With the decision to digitise, the EU will now have the upper hand to deny market share to rice from the central Indian State. <\/p>\n\n\n\n

Thus, the EU has come up with a strategy to overcome any situation that will affect its trade and industry, said Chandrasekaran. \u201cIndia will also have to be vigilant while discussing these issues and come up with its own protection policies,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Proposes to impose barriers to new players in market, hike security deposit for default The GI tag given to basmati rice by the Indian authority recognises Punjab, Haryana, Uttar Pradesh, Himachal Pradesh, Uttarakhand, Jammu and Kashmir and Delhi as the growing regions | Photo Credit: KAMAL NARANG The European Union has come up with a […]<\/p>\n","protected":false},"author":1,"featured_media":12012,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[176],"tags":[215,46,167,159],"class_list":["post-12011","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-basmati-rice","tag-asian-rice","tag-indian-rice","tag-global-rice-news"],"acf":{"enable_premium_overlay":false},"yoast_head":"\nSet to sign FTA with India and give basmati GI tag, EU plans to protect domestic rice industry\u00a0 - Rice News Today<\/title>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Set to sign FTA with India and give basmati GI tag, EU plans to protect domestic rice industry\u00a0 - 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