The Agricultural and Processed Food Product Export Development Authority (Apeda) has blacklisted two private basmati rice brands, Mohsen and Avazah, owned by importers in Saudi Arabia, Iran and the United Arab Emirates, with immediate effect.
The move follows persistent payment defaults on the part of the Gulf-based importers to Indian exporters.
Until two years ago, many Indian exporters were booking orders from Iran, the UAE, Bahrain and other Gulf nations, and shipping 1121-variety basmati rice under the two aforesaid private brands.
Informed sources said several importers in the Middle East and Iran had defaulted in making payments of at least $200 million to Indian exporters, and that the amount could be even more. Buyers from these nations have shut shop overnight and vanishewd, leaving Indian exporters in the lurch.
“Complaints have been received by Apeda from exporters about non-payment for basmati rice shipments from India under the private labels Mohsen and Avazah. It has been decided to blacklist these two brands,” Apeda said in a statement.
Indian exporters say they used to procure the aromatic rice from local farmers and put the Mohsen and Avazah labels on the packages before shipping them to buyers in the Gulf.
These two brands have been under Indian government’s lens for at least three years, following reports of sporadic payment defaults.
In order to avoid any dissent, Apeda has directed Indian exporters not to apply for registration of contract -- a pre-requisite for shipping any agricultural consignment -- involving these two brands. It has also told them in no uncertain terms that it will not issue Registration-cum-Allocation-Certificate (RCAC) for shipments under these labels.
“No RCAC will be issued by Apeda for export of basmati rice in Mohsen and Avazah brands to any country with immediate effect,” said an Apeda circular.
For the period between April and December 2019, India exported 2.86 million tonnes of basmati rice worth $3.1 billion.
“The government wanted the trade to be free from any restrictions and hence took time to take action. But defaults were going on and on. We did not want Indian farmers, exporters and others in the export value chain to suffer endlessly. Hence, we blacklisted these two brands,” said a senior government official.
While the overseas defaulters accounted for just 10 per cent of the 4.6 million tonnes of Basmati reaching Gulf shores, the official said it nevertheless had an impact on the entire export value chain, including the farmer.
He added that India has achieved sizeable growth in basmati rice exports. “There are other issues like pesticide residues in Europe etc. with shipments of the rice. But, Indian exports of the produce have grown significantly and should continue to do so, going forward,” he asserted.