Iran team looks at India wheat for possible imports.

MUMBAI: A delegation from sanctions-hit Iran arrived in India on Tuesday to explore the possibility of importing wheat from the south Asian nation, which has huge stocks and wants to reduce its trade imbalance with the oil exporter, government sources said.

Food shipments to Iran are not targeted under Western sanctions aimed at curbing Iran's nuclear programme, but payments remain difficult because of financial sanctions, even though India has just won a waiver from Washington on the strictures.

India, Iran's second-biggest crude client, hopes it can reassure Tehran on quality and secure wheat sales to help settle part of its $10 billion a year-plus oil import bill through a barter-style mechanism using rupees.

But an Iranian bank has just stopped payment guarantees for importers using this mechanism because not enough rupees have been deposited in its account to back them.

"The delegation will be in India for seven days, visiting warehouses and laboratories in three leading wheat producing states," one government source said.

The delegation from Tehran will primarily see whether India's wheat meets the quality norms of Iran, another government source said, with actual deals unlikely to emerge at this stage.

Iran has not been buying Indian wheat since the mid-1990s because of concerns about Karnal bunt, a fungal disease.

India has plenty of wheat to sell if Iran is convinced. On June 1, India's wheat stocks at government warehouses surged to a record 50.2 million tonnes, well above the official target of 4.0 million tonnes for the quarter ending June 30.

Source : economictimes.indiatimes.com