Indian companies start receiving payments stalled since 2019 from Iran for basmati rice exports. Iran starts clearing basmati rice dues of Rs 1,700 crore.
Iran begins clearing basmati rice dues
The largest importer of basmati rice, Iran, has started clearing its dues to Indian basmati exporters. Vinod Kaul, executive director of All India Rice Exporters Association, confirmed that exporters have received around Rs 900 crores, which makes 52% of the total debt of Rs 1700 crores. Companies have been repaid through UCO and IDBI bank.
Rice exports to Iran decreased due to lack of assurance of payment.
Rice exports to Iran came down by 25% in the April-November period of 2020 because of non-payment of dues. However, companies have started receiving remittances now, which will hopefully increase basmati exports to the middle eastern country. Besides, a Sonepat based exporter confirmed of receiving payments in dirham from Iranian agents based in Dubai. This is a good sign as around 40% of rice trade with Iran occurs from January to March.
Demand for basmati soars from EU
The demand for basmati rice from EU soared 70% in FY 2020-21.Exports to EU has increased 10% in the past two months. Belgium, Italy and Netherlands have mainly contributed to the rise in orders.
Last year, India exported 1.32 million tonnes of basmati rice to Iran, earning Rs 8,846 crore. India produces around 7 million tonnes of basmati rice annually. Out of this, 60% is exported and 40% is sold in domestic market.
In all, exporters expect rice exports to increase ahead of Navroz festive season, starting the New Year in Iran. Also, the new administration in the US will hopefully lift the sanctions against Iran. This may also add to the orders.