The EU enforces laws to protect its rice industry

The European Union (EU) has enacted a series of laws to protect its domestic rice industry even as it negotiates a free trade agreement (FTA) with India. In connection with the proposals of the European Commission to the Council of the EU on a series of measures to protect domestic industrial enterprises, the European Commission published a notice on the implementation of the laws. According to S Chandrasekaran, Geographical Indication expert and author of Basmati Rice: The Natural History Geographical Indication, the laws were passed because the EU is preparing a Geographical Indication (GI) on top of Indian basmati rice. signature Free Trade Agreement with New Delhi.

Restrictions on import licenses

“India must now raise this issue in the FTA negotiations. Otherwise, it will lose out especially in the rice sector”, The EU proposals include changes to basmati rice milling and sales rules, increased security deposits, electronic invoicing, electronic authentication and online consumer protection. One of the proposals will put a hurdle for all new basmati players to get an import license after two years of experience in rice cultivation. European mills mainly import pre-husked basmati rice, and the European rice milling industry and brands have consolidated over the past two decades. Two major European players likely to benefit are Spanish company Ebro Foods, which owns premium basmati rice brand Tilda, and Italian company Euricom.

EU industry fears

This means that an Indian producer of a basmati brand that plans to set up a mill in the EU to benefit from zero imports will have to wait for basmati rice to receive a Protected Geographical Indication (PGI) from the EU. The application has been pending since July 2018.

Indian companies buying rice mills from Europe lose market and margins due to the mandatory two-year waiting period. The EU has also banned the transfer of import permits between traders. “Even if an Indian company takes over a commercial company with technical experience, its track record is questionable. The embargo is a precautionary clause to ensure that Article 4 is not circumvented” Chandrasekaran said. The laws appear to have been implemented because European industry fears that major Indian brands will be harmed if the EU signs a free trade agreement with India. and fragrant rice is granted SMM. A two-year gestation period is the primary defense of European basmati players.

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