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India, Pak launch initiative to defend basmati

Both countries agree to launch measures to fight a joint battle in global trade forums for the rights of geographical appellation to basmati rice, reports Gaurav Choudhury.

business Updated: Aug 01, 2007 21:36 IST

India and Pakistan, easing up trade relations, on Wednesday agreed to launch formal measures to fight a joint battle in global trade forums for the rights of geographical appellation to basmati rice, which they want to be used like a brandname for the aromatic grain grown in South Asia.

As the commerce secretaries of the two nations rounded up talks, they set a $10 billion target for bilateral trade by 2010. Currently, official bilateral trade is under $2 billion in view of a host of artificial restrictions, though much more business is routed through centres like Dubai.

The trade measures take up included steps to hasten cement imports from Pakistan, and an agreement for banks from the two sides to open branches across the border by December 31.

State Bank of India (SBI) and Bank of India (BoI) will set up branches in Pakistan while United Bank and National Bank from Pakistan will commence operations in India.

The neighbours agreed to jointly file for a geographical indication of basmati rice to end the dispute over sale of the rice variety. Historically, basmati refers to the long-grained aromatic variety grown in India and neighbouring regions, but similar looking grains developed by US scientists have raised questions on whether such a variety can be described by the same name.

The two countries will set up a technical committee to take up the basmati issue, a joint statement issued at the end of fourth meeting on economic and commercial cooperation between India and Pakistan under their composite dialogue process.

Islamabad also raised the issue of a notification by New Delhi, allowing export of Super Basmati variety that Islamabad claims has been developed by it. "India has agreed to look into the issue," the joint statement said.

India, which is currently facing a shortfall in domestic production compared with demand, has decided to hasten the import of cement from Pakistan and said that it will complete all statutory formalities on a fast track.

"In Pakistan, up to 15 million tonnes of cement is available for export. The first shipment should be ready by next month," Pakistan's Commerce Secretary, Syed Asif Shah, said.

India has also agreed to encourage export of Indian tea through rail route. This would discourage trade of tea through unofficial routes such as Dubai. "The Pakistan side also noted the request for providing duty concessions on import of Indian tea," the joint statement said.

India gave Pakistan a list of 484 tariff lines for inclusion in Pakistan’s positive list of items importable from India, and has asked Pakistan to submit a list of the 20 items that might be facing non-tariff barriers.

The two countries have agreed to establish telecom connectivity at an early date and also reviewed the progress of laying optic fibre link.

A technical-level meeting will be held on August 20 at the Wagah border on Pakistan side to sort out the issue of truck movement through this trade point.

India proposed that to reduce pressure on the Atari-Lahore rail route, the Munabao-Khokrapar route, too, should be opened for freight movement. "Pakistan has noted the proposal," the statement said.