Iran looks to import 3 million tonne Indian wheat Close.

NEW DELHI: The Indian government has initiated the process of exporting wheat to Iran. The sanction-struck Asian neighbour has made enquiries to the Indian government for an import requirement of up to 3 million tonne. This is likely to be purchased by Iranian government agencies as well as private importers.

Iranian firms such as Kengan Wheat Flour Factory, ALP Company and Magna Business Management have sent wheat import enquiries to the Indian government-run agency Agricultural and Processed Food Products Export Development Authority (APEDA) through the Indian embassy. "Two Indian firms have shown interest in shipping wheat to Iran. However, no export has taken place so far to the beleaguered country," said a senior APEDA official.

A wheat production of 88.31 million tonne in 2012 is driving exports. The strong stock position of wheat in the central pool, at 23.4 million tonne, is also boosting export prospects. After opening wheat exports in last September, the country has shipped about 6 lakh tonne to countries like Bangladesh, UAE, Nepal, Thailand and other countries.

Indian traders, however, are skeptical about payment for the exports after Iran defaulted on rice imports from India. But a payment mechanism recently set up by the two countries, which allows using the rupee for 45% of oil dues and to pay Indian exporters, has instilled some confidence in Indian exporters.

"More companies will come forward now to export wheat and other items to Iran if the new mechanism works well," said an Indian exporter.

According to media reports, Iran is scaling up grain imports to hedge against the growing impact of sanctions and poor crops due to dry weather. It has been importing wheat from Russia, Australia and Pakistan in large quantities. In 2007-08, Iran imported around 8 million tonne of wheat when it had a poor harvest.

Apart from wheat, Iran is also looking at importing sugar, IT products, machinery, metal products, iron, steel, minerals, clothes, fibre, tea, wood and automobiles from India.

Source : economictimes.indiatimes.com