Donald Trump may have fired another salvo by threatening to impose further tariffs on Indian rice exports to the US yesterday, but as far as India is concerned, that is the least of its worries as far as the world’s most eaten staple is concerned.
India is involved in a long-drawn out battle over the origin story of the famed fragrant long grain rice called Basmati — and by all indications, it is losing.
ALSO READ | Besides Kashmir, cricket, the ‘other’ India-Pakistan war you didn’t know about!
The immediate danger to rice exports from India, New Delhi, is the world’s biggest exporter of rice, stems from a Washington meeting of the US President on Wednesday with a farmers group, whereby it was brought to his notice that cheap imports were making rice cultivation in America uncompetitive. With India already labouring under 50% tariffs on about half the goods it exports to the US and the trade deal talks still rambling along, it did hit headlines and cause worry lines in the corridors of power in the Indian capital.
However, in reality, experts don’t give much credence to the latest threat due to two reasons. One is Trump’s seemingly random threats that seem to have a method in its madness, and that is aimed at blindsiding the rival side into folding fast. It wasn’t lost on anyone that the latest utterances came even as American trade negotiators Brendan Lynch and Rick Switzer were set to land in Delhi today, Wednesday.
Secondly, rice exports from India are just about 392 million dollars, and that constitutes only 3% of its total rice exports all over the world. And they anyway already attract duties of more than 50%.
But beyond tariffs, India does face a major problem when it comes to rice, or at least, its most famous and cherished rice varietal — the basmati rice. It has been fighting an uphill battle over the intellectual property (IP) and geographical indication (GI) tag over the origin of basmati, and by all accounts, it is losing.
And to none other than its bete noire, Pakistan.
The basmati rice is cultivated primarily anywhere from the foothills of the Himalayas in India’s Gangetic plain, in the fertile farmlands of Punjab, and in Sindh. The issue? Since the partition when Punjab was split between India and Pakistan, both nations have been at odds over who is the rightful owner of billing themselves as the ‘home of basmati’.
The fight is similar to France fighting hard to limit the use of the ‘Champagne’ term only to sparkling white wine from the vineyards of the Champagne region of Northeastern France.
Problems came to a head a few years ago when India had to cut down its production and export of basmati rice, a vacuum which Pakistani Basmati rice cleverly stepped into. Then India’s Commerce ministry committed what, in hindsight, was the next blunder — it tried to stake its claim for GI tag for Basmati rice in foreign courts.
The result has not been favourable to New Delhi. Earlier this year, New Zealand and Australia both accepted Pakistan’s claim that basmati originated from the Hafizabad district of Pakistani Punjab. Kenya also struck down Indian claims, allowing trade marks with Basmati to be registered.
Adding insult to injury, the European Union accepted that long grain rice from Sindh could be marketed as Basmati, despite India’s vehement opposition. However, a final decision from Brussels may still be pending, while it figures out a smooth way to extricate itself out of the situation — given a choice, it would have preferred to accept Basmati as from both India and Pakistan, but the pending trade deal with India, as well as historical precedence, means it will have to tread carefully so as not to ruffle both countries.
Beyond national pride, there is a lot of economics also riding on GI tags, since they often come with zero duty. For example, in the recently concluded India-UK free trade deal, heritage Feni from Goa was given such a status, which ensures it can be exported from Goa to the UK at no additional tariff. The same is the status both countries covet when it comes to Basmati as well. And the stakes are mighty high — at last year’s figures, Pakistan is catching up with 4 billion dollars worth of basmati exports to India’s 5 billion dollars. India’s main export markets include the Gulf countries as well as Iran and some countries in Africa, spurred equally by the demands from the diaspora as well as the global popularity of biryani and pilaf (pulao) dishes in recent years.
