DRI unearths over Rs 1,000 crore scam in rice export

Authorities have unearthed a massive scam in export of high-quality Basmati rice to Iran, running into over Rs 1,000 crore, in which the commodity was fraudulently diverted mid-sea to Dubai.

According to a probe being done by the Directorate of Revenue Intelligence (DRI), over two lakh metric tonnes of Basmati rice was illegally offloaded in Dubai in the last year instead of in Bandar Abbas in Iran, official sources said.

Over 25 big exporters from Haryana and Punjab are under the scanner of DRI and other agencies for their involvement in the multi-crore scam, they said.

Explaining the modus operandi, the sources said rice would be taken to Gujarat's Kandla Port by these exporters. They would then file Shipping Bills--documents filed with customs authorities carrying details of goods to be exported, consignor and consignee--for export to Iran, they said.

Instead of the consignment reaching Iranian shores, it would be diverted mid-sea to Dubai allegedly with the connivance of cargo ship operators carrying the goods.

Surprisingly, payments were also made from Iran to these exporters in India. Importers and port officials would allegedly acknowledge the receipt of rice and allow payment to be made against it here, the sources said.

What is worrying for intelligence agencies here is that they do not know the end-use of rice off-loaded in Dubai. They suspect use of rice as barter system to fund some illegal activity like terror financing, the sources said.

The DRI has red-flagged the scam at the highest level and is in touch with authorities concerned in Dubai about the scam. Prima facie, two lakh metric tonnes of rice valued at about Rs 1,000 crore has been off-loaded in Dubai instead of Iran, they said.

While India lost foreign exchange which it could have got from Dubai in case of genuine trade, Iran was also deprived of customs duty it would have been entitled to if rice was delivered at its shore, the sources said.

The authorities suspect the proceeds of the scam assumed the form of black money. The DRI has informed Supreme Court- appointed Special Investigation Team on black money about the case. It has also roped in the Enforcement Directorate to look into the matter, they said.

Legal export of rice from the country has risen in the past two years. India had exported 2,77,880.22 kg of Basmati rice to United Arab Emirates in 2014-15. About 4,11,776.06 kg of rice had been sent to the UAE between April and November 2015, as per the latest data of export compiled by Directorate General of Foreign Trade.

A total of 9,35,567.81 kg of Basmati rice was exported to Iran in the last fiscal and 4,57,023.63 kg between April and November this financial year, they said.