Brain Booster for UPSC & State PCS Examination (Topic: India and Pakistan on Basmati Rice)

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Topic: India and Pakistan on Basmati Rice

India and Pakistan on Basmati Rice

Why in News?

  • India, the world’s largest exporter of basmati rice, has applied for protected geographical indication (PGI) status from the European Union’s Council on Quality Schemes for Agricultural Products and Foodstuffs.
  • This would give it sole ownership of the basmati title in the European Union (EU).

Background

  • The stand-off began when India filed a claim in the EU on 11 September 2020, seeking GI status for its basmati from the union’s Council on Quality Schemes for Agricultural Products and Foodstuffs.
  • This status would’ve provided New Delhi a monopoly over basmati rice markets in Europe.
  • Pakistan, which is the only other basmati rice exporter in the world, has opposed this move as it would adversely impact its own exports, especially as the EU is a major market for its basmati. Therefore, it filed a counter-petition in late 2020.
  • In 2006, the EU had recognised basmati as a joint product of India and Pakistan but New Delhi has been trying to be the sole owner of the GI tag.

Recent Update

  • India and Pakistan are expected to share ownership of the coveted branding rights for basmati rice in markets of the EU.
  • According to sources, both nations are likely to reach an agreement after opposing each others’ claims for getting Protected Geographical Indication (PGI), or GI tag, for the product in the EU.

Importance of GI Tag

  • According to estimates, the GI tag for Indian basmati could’ve boosted the country’s exports to the European markets from the current $250 million to $500 million.
  • According to Union 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.

Basmati Rice Market of the EU

  • The unfettered access to the basmati rice market of the EU is also crucial and sought after because according to analytical reports, the European basmati rice market which was valued at $491 million in 2016, is expected to reach $615 million by 2023, registering a Compound Annual Growth Rate (CAGR) of 3.2 per cent from 2017-2023.