India to iron out Basmati import row with Iran

Indian Basmati rice exporters, hit by Iran’s decision to restrict imports last year, are likely to get some encouraging news next week.

Senior officials from both sides will meet in Tehran on Monday to sort out pending issues related to high import duties, quality norms and import licenses so that shipments can start moving soon.

Commerce Secretary Rajeev Kher is leading a delegation of officials and businesspersons to Iran next week with the primary agenda of removing all hurdles on rice imports and also to promote other potential business areas such as pharmaceuticals.

Pesticide residues

“In 2013, Iran had imported a lot of rice and had huge stocks. So, they raised their import duties when their own harvest came in the market in order to protect their farmers. They also raised the issue of (high) pesiticide residue in our rice,” Commerce Secretary Rajeev Kher told

BusinessLine . Kher said that the problem related to the pesticide residue will get sorted out in his meeting with Iranian officials as it was basically related to the issue of high stocks which is not a big problem anymore.

“I am hopeful that all issues including high import duties and the pesticide residue will get addressed and licences will be issued soon for imports,” Kher said.

Sliding shipments

Iran is India’s largest Basmati rice market with exports in 2013-14 rising to 1.4 million tonne (mt) – roughly 40 per cent of total Basmati shipments. Iran stopped issuing import licences since October last year as there was a glut in the domestic market. It also raised its import tariffs to 45 per cent. “In 2014-15, exports are expected to be lower at 0.9 mt because of the restrictions. In the new fiscal, we hope to export about 1 mt,” AK Gupta, Director, Basmati Export Development Foundation, APEDA, said.

Higher duty

While Iran brought down import duties to 22 per cent in January this year, but exporters claim that they are still being made to pay 45 per cent under various other categories.

“The increased level of duty is maintained because most of it is charged in the form of other duties which are directed into agricultural development. The importer has to pay the same amount of money but all of it is not classified as import duty,” Gupta said.