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India asks European Union to allow duty free exports of all basmati rice varieties

In a move that is expected to give boost to rice exports, India has approached the European Union (EU) and the United Kingdom (UK) for allowing duty-free exports of all the 29 varieties of basmati rice notified by the agriculture ministry. At present, under a code of practice and regulations signed in 2004, only eight varieties of basmati rice are allowed duty-free exports from India to EU and UK while those varieties notified afterwards, especially Pusa 1121 (2008) and Pusa 1509 (2013), which constitute at least 70% of around 4 million tonne of aromatic rice exports annually, are subject to a higher level of import duties.

Trades sources told FE that a zero rate of import duty is granted to eight varieties of husked basmati rice, including 370, 386, 217, Ranbir, Pusa basmati and Super. While only 10% of India’s total basmati rice production is exported to EU including UK, the realisation from shipments is much higher than the bulk of basmati rice exports to Gulf countries such as Iran, Saudi Arabia, United Arab Emirates, Iraq and Kuwait. “Currently, exports of basmati rice varieties which were notified after 2004 attract a duty of €165 per tonne, which makes it costlier against other rice,” an exporter said.

India being the top rice exporters for last many years, shipped 3.5 lakh tonne of basmati rice to EU valued at Rs 1,744 crore in 2016-17. Overall basmati rice export from India was Rs 21,605 crore for FY17. “There is ample scope of increasing shipment to EU and UK as code of practices and regulations signed more than a decade back needs to be revised,” an official said. He also said that they have received positive feedback from EU and UK authorities.

Out of the total annual value of basmati rice exports, five countries – Saudi Arabia, Iran, United Arab Emirates, Iraq and Kuwait — have share of more than 68%. “EU and UK allowing more varieties of basmati under import duty free regime would boost rice exports prospects,” an official said. This follows EU’s recent decision to impose a stringent maximum residue limit (MRL) for Tricyclazole, a fungicide used by farmers against a disease which impacts basmati rice crop from December 31, 2017. The exporters in the country have launched an extensive campaign to educate the farmers in key growing states of Punjab, Haryana and western Uttar Pradesh on the judicious use of pesticide.

“Many a times rice exports consignments were rejected because of detection of pesticides residues and our focus would be to educate the farmers against use of excessive pesticides which would lead to higher price realisation,” Vijay Setia, president, All India Rice Exporters Association (AIREA) had said.