India's basmati exports to Iran may get stuck as importer defaults
01 September 2018
India’s hopes to gain from the resumption of Basmati rice exports to Iran that started in March last year, looks stuck with an Iranian exported defaulting on payments due for the aromatic rice exported to the Gulf country, reports quoting an exporter said.
The fraud committed by the Iranian importer is reported to have resulted in nearly Rs1,000 crore of export proceeds of Indian rice exports getting stuck.
Iran is the largest buyer of India’s basmati and accounts for a fourth of India’s annual aromatic rice shipments of around four million tonnes.
The country restarted rice import registration last year between 21 January and 21 June 2017.
The All India Rice Exporters’ Association (AIREA) said the import fraud was committed by an Iranian company, but said the things are being sorted out with both governments seized of the matter.
“The industry has around Rs1,000 crore outstanding from Iran,” a Hindu BusinessLine report quoted Gurnam Arora, joint managing director of Kohinoor Foods Ltd, as saying.
Vijay Setia, president of AIREA, said one particular Iranian importer owes a lot of money to Indian exporters. It seems that the Iranian firm has siphoned off the funds, he said.
The Iranian government has been giving the currency at a concessional rate to importers so that they can make payments towards exporters from India.
The Iranian Rial has witnessed a sharp fall of over 100 per cent against the dollar since March this year on return of US sanctions and worsening economic crisis.
“Three Indian exporters had given us a complaint which we have forwarded to the Apeda and Indian embassy in Tehran,” he added.
Rice exporters are also in touch Iranian Embassy in Delhi. When appraised him of the fraud committed by the Iranian firm, a senior official at the embassy assured them of all help.
Indian firms exported 4,26,034 tonnes of basmati rice, worth Rs3,089 crore during the first three months of the current financial year, according to the Agricultural and Processed Food Products Export Development Authority (APEDA).
In 2017-18, Iran imported 8,77,422 tonnes of basmati worth Rs5,830 crore, according to the official data.