World's costliest rice, Indian basmati, may lose the tariff concession it gets in the European Union if the region's latest draft on new rice import regime is made into a law, proceedings for which have already been set in motion.
The proposed new rice import regime with a lower intervention price for brown basmati seeks to benefit the United States at the cost of developing countries like India and Pakistan, official sources said in New Delhi.
"The EU has submitted a proposal to its council for a regulation on common organisation of the market in rice, which
if cleared will ensure that the 250 European Currency Units tariff advantage enjoyed by brown basmati will become
infructuous without even being formally withdrawn", a top government official told PTI.
He said the EU proposal is to reduce the intervention price, which is the basis for providing the 250 ECU tariff
concession to 150 Euro per tonne from the present 298.35 Euro a tonne for the husked or brown basmati.
Once this happens, brown basmati imports will automatically enjoy zero duty in the EU and the 250 ECU tariff
concession will not be required at all, he said, adding more importantly imports from developed countries like the US will also be subject to zero tariff eroding India's competitive advantage.
The 'ceiling price' above which import of basmati is eligible for 250 ECU tariff concession is 180 per cent of
'intervention price'. Applicable duty is difference between ceiling and reference price, where the latter is the average
international price at a given point of time.