India may get GI Tag for Basmati Rice from EU

On May 8, when EU-Indian officials met in a virtual summit, a joint statement was issued. Paragraph 23 of the statement clearly indicates that India has set the tone to obtain GI (Geographical Indication) tag for her basmati rice.  

If not the GI tag, then at least India can obtain concession in marketing this fragrant long-grained rice in the EU, as per trade analysts.  

What paragraph 23 says 

“We recognized our mutual interest in protecting geographical indications. In this regard, we underlined the benefits of a balanced bilateral agreement on the protection of geographical indications. We look forward to the early conclusion of the Memorandum of Understanding (MoU) between the EU Intellectual Property Office and Department of Promotion of Industry and Internal Trade.” 

Benefits of the agreement 

Both the sides (India and the EU) have given each other enough scope to negotiate the issue of GI tag for Basmati rice and for EU demand for market access to its products. The issues will be followed up and carried forward in the next interactions, talks, and negotiations.  

What paragraph 17 says 

“We agreed that in order to create the required positive dynamic for negotiations, it is imperative to find solutions to longstanding market access issues. We also agreed to the launch of negotiations on a standalone investment protection agreement. We also agreed to start negotiations on a separate agreement on geographical indications which could be concluded separately or integrated into the trade agreements, depending on the pace of negotiations.” 

What does it indicate? 

As per experts, this MoU and the clauses of the paragraphs indicate that India could seek GI tag for its Basmati rice. At the same time, we could also seek exclusive marketing rights for Darjeeling tea and Alphonso mangoes, besides a few other produces like textiles and handicrafts.  

In return, the EU could demand for market access for its wines and spirits.  

Basmati exports scenario of India  

Basmati export is vital for India as it contributed $4.06 million (Rs. 29,849 crore) in the last fiscal. Its per unit value, which was at $868 (Rs. 63,575) per tonne, was higher than double than that of non-Basmati rice, which stood at $366 (Rs. 26,800).  

What’s the issue of GI tag? 

The chief issue of GI tag for Basmati in the EU was that Pakistan had laid claim to it and filed a counter in December last year. India had registered for GI tag in August last year.  

Under EU regulations, both countries had a time of six months (till May 8) to negotiate the issue, but nothing happened. Meanwhile, the India-EU Summit happened and this raised hopes of a settlement.  

As per Indian experts, exports of Basmati to the EU could double from the present $250 million (Rs. 1,831 crore). Last fiscal, EU had imported about 2.88 lakh tonnes of Basmati rice. The previous import was just 2.11 lakh tonnes.  

The glitch 

According to some trade analysts, the problem with giving market access to European wine and spirits is that, in India, limited population consumes foreign liquor. The country already has a well-established liquor market with annual sales of Rs. 1.6 lakh crores. South India, alone, constitutes 52-53% of this share.  

Wines constitute Rs. 1000 crores of the total liquor market.