Twofold rise in processed food, Basmati rice exports to Iran

In value terms, India's Basmati rice exports to Iran increased by 137%, or nearly three folds

India’s agriculture and processed food exports to Iran have more than doubled in quantum and value terms in the last one year, mainly on account of an exceptional surge in Basmati rice exports. If the trend continues, this year’s export of Basmati to Iran could be the highest.

In value terms, Basmati rice exports to Iran increased by 137 per cent (nearly threefold rise), while in terms of quantity it increased by 77 per cent, between April and September 2013 and 2014, data from Agricultural and Processed Food Products Export Development Authority (Apeda) show.

Between April and September 2013, total food exports to Iran was valued at Rs 7,104 crore, against Rs 3,043 crore in the same period last year, a rise of nearly 133 per cent, according to Apeda. In terms of quantity, the amount of exports increased by almost 104 per cent between April and September this year over the corresponding period last year.

“This year there has been a great surge in Basmati exports to Iran. While the quality of rice exported from India has improved, there could be other reasons for the rise in exports.  It might be the reason that the Iranian government wants to stock up their inventory,” said R Sundaresan, executive director, All-India Rice Exporters Association.

After US sanctions against Iran, India’ export to that country had suffered a setback. However, with Iran being a key oil supplier to India, both countries reached a new payment mechanism in 2012. Under this, 45 per cent of India’ crude payments were made in rupees through UCO Bank. The rupee resources were being used for making payments for Indian exports.  Thus, with Iran unable to procure foodgrains from other countries, India’s rice export has witnessed a surge in volume.

About 85 per cent of India’s agriculture and processed food exports to Iran are on account of Basmati.

However, India’s exports might be affected by the recent deal of six major countries (the US, France, Germany, Britain, China and Russia) with Iran to ease Iran’s nuclear plans in lieu of temporary relief over sanctions.