India opposes EU basmati norms

India is opposed to the quality certification norms proposed by the European Union for exporting Basmati to the region, a senior government official said Thursday.

Basmati, which is cultivated only in a small part of the Indian subcontinent, is the world's costliest rice, fetching a premium for its unique fragrance, aroma and grain length and when exported in husk (brown basmati), it enjoys a zero per cent import duty in the European Union.

"The EU has proposed that to be eligible for the zero duty concession, each container of brown basmati exported to the region should be certified as genuine produce with even the specific basmati variety labelled on it which we do not consider viable or practical," a commerce ministry official told CRISIL MarketWire.

He said such a "variety-wise" certificate of authenticity (CoA) would not serve any purpose and will be a time-consuming and costly affair.

The Agricultural Products and Processed Foods Export Development Authority (APEDA) has already prepared a DNA testing mechanism which can certify rice samples as basmati or non-basmati and zero in on adulterated varieties.

The testing protocol will be taken up for discussions shortly with the EU and Pakistan as well, since it also cultivates basmati and will be party to any basmati trade arrangement agreed upon with the region, the official said.

Basmati testing methods are likely to be finalised in a month or two but a lot will depend on how the three parties view each other's concerns on certification.

India favours issuing CoA to EU-bound export consignments, certifying them as just 'basmati' and is against extending the concept to the level of 'varieties'.

The EU has contended that the 0 per cent import duty concession has been granted to only six traditional Basmati varieties along with 'Pusa' and 'Super' varieties and therefore the certification process has to be more extensive and detailed in nature.

EU has also argued that the DNA testing protocol is advanced enough to identify the specific variety to which a grain of Basmati belongs to.

"The protocol can pin-point varieties, no doubt abut it, but will take a longer time in testing and the costs will go up", the official pointed out.

India exports duty-free, around 150,000 tonnes brown Basmati annually to the EU. Under the existing arrangement, EU reserves the right to withdraw the duty concession if there is a surge in imports but no specific quantitative restriction has been specified.

The EU made changes in its rice import regime earlier this year but retained the concessions for Basmati trade though with certain alterations including those on quality certification.

Duty-free import of brown or husked Basmati works to the advantage of rice millers in the EU, who after processing it can then make larger profits than they would have in event of paying customs duty.

While bulk of Indian Basmati exports are of the Pusa varieties, those of Pakistan are of the Super variety. India's annual worldwide Basmati exports range from 650,000 tonnes to 800,000 tonnes.