India’s basmati rice exports to Iran, which make a quarter of the country’s total aromatic rice shipment, are expected to get further boost following likely easing of sanctions imposed on the Islamic nation by the US-led alliance.
Commerce ministry sources said India had launched a ‘rupee settlement mechanism’ from April 2012 with Iran to weather the sanctions from the US and EU. As part of the initiative, state-owned UCO Bank has tied up with Iranian lenders — Parsian, Pasargad, Saman and EN Banks — for settlements of dues.
However, rice exporters say that often the settlement of payment for exports of Basmati rice to Iran takes time. “It would be much more easier to get payment for the rice exports to Iran following the removal of sanction by the US,” a commerce ministry official told FE.
Of total exports of 3.7 million tonne of Basmati from the country in 2013-14, 1.4 mt was shipped to Iran, the largest destination for India’s aromatic long-grain rice shipment. However last fiscal, India’s Basmati rice exports to Iran dropped to 9 lakh tonne because of sluggish domestic demand there.
Out of the total value of Rs 27,597 crore basmait rice exports in the last fiscal, India exported Rs 6,758 crore worth of basmati rice to Iran, which is now the second biggest destination of aromatic rice from the country.
Because of rising demand, India’s basmati exports to Iran grew from 6 lakh tonne in 201–12 to 1.4 mt in 2013– 14. However commerce ministry officials said Iran needs about a million tonne of basmati rice from India annually.
Meanwhile, Iran and India have also agreed to have referral labs in India for testing rice consignments rejected by Tehran because of the presence of pesticide residue.
“Henceforth, in case of disputes on pesticide residue levels, the report of these labs would be final,” an official said.