Basmati's aroma has swept the Europeans off their feet. The European Union (EU) allows basmati varieties originating only from Pakistan and India to be imported and sold as basmati. But, EU's rice import policy depends upon its own farmers producing rice that it has to subsidise by paying an intervention price. Europe's own stocks of rice are of inferior quality but much higher priced. They do not find a market and are instead used to meet food aid commitments to developing countries.

Before the 1994 Uruguay Round global trade negotiations the EU import regime had taxed basmati out of the market. However post Uruguay, EU agreed to impose a progressively reducing tariff rate. USA, competing against the cheap Vietnam rice exports, took advantage of a World Trade Organisation clause which taxed the higher priced commodity at lower rates. The Indian and Pakistani exporters convinced EU into giving a duty reduction for basmati. The US protested, saying its aromatic 'basmati' rice had not been given the same concession. EU changed the rules, skewing them against sub-continental basmati varieties again, bringing in procedural hindrances for basmati import. Indian and Pakistani exporters pressed again for revision of the policy and got it reverted.

But the EU now believes that basmati's aroma also destabilises its own rice markets and it is trying to overhaul the rice import regime. Negotiations continue till date. V K Kaul, assistant director at the Indian Agricultural And Processed Food Products Export Development Authority, says, "If EU increases the tariff, India will lose the advantage it has in the EU markets today."

The battle in Brussels is one example, where an astute exporters lobby, backed by the government, has been able to keep its own. If India can maintain the same perspicacious vigil on international markets and a rational policy at home, basmati can remain India's and Pakistan's monopoly.