Land routes opened for basmati exports to Bangladesh, Nepal

Basmati exports dropped 20.4% in value terms to $585 mn (Rs 3,901 cr) in April-May this year, against $735 mn (Rs 4,651 cr) in the corresponding period last year

The central government has opened the eastern and north-eastern border for transport of basmati rice through land customs stations (LCS) to Bangladesh and Nepal.

Both neighbours have been consistent importers of basmati but only through sea to Bangladesh, despite the large land border. With the opening of transportation through LCS, this export would get a fillip, said A K Gupta, director, Agricultural and Processed Food Products Export Development Authority (Apeda).

Such export through LCS to Bangladesh and Nepal would be subject to registration of the quantity with the Directorate General of Foreign Trade. The latter has said this would be allowed from October 1 but must also be covered by either a bank guarantee or by the Export Credit Guarantee Corporation.

Apeda data show basmati exports declined by 20.4 per cent in value terms to $585 million (Rs 3,901 crore) in April-May this year, first two months of this financial year, as against $735 million (Rs 4,651 crore) in the corresponding period last year. In volume terms the fall was four per cent, to 750,000 tonnes as compared to 780,000 tonnes.

  "We were transporting basmati to Nepal through Bhairawan, a location in Nepal near Lumbini, through our distributors near the border, with realisation in rupees. Opening of the Bangladesh is also a good move. Both markets would add a good quantity of export," said Gurnam Arora, joint managing director, Kohinoor Foods.

Basmati export to Bangladesh declined by nine per cent to 745 tonnes ($0.9 mn) in 2015-16 from 818 tonnes ($1.01 mn) the previous year.