A temporary ban has been placed on the import of agro products from India to balance Iran’s trade with India, according to the secretary of Iran’s Rice Suppliers Commission.
“The ban is not restricted to rice and also includes other agricultural products such as tea. It will be lifted as soon as bilateral trade is balanced out, or registers growth,” Masih Keshavarz was also quoted as saying by IRIB News.
Latest data released by the Ministry of Commerce and Industry of India confirm that Iran has registered a trade deficit with India.
The data show transactions stood at $1.98 billion in the first nine months of 2022. Iran’s export to India hit $474 million during the period, registering a 44.48% rise compared with the corresponding period of last year. The exported goods mainly included petroleum products worth $121 million, dye intermediates worth $112 million, fresh fruits worth $110 million and organic chemicals worth $38 million.
Iran’s imports from India during the period stood at $1.51 billion registering a year-on-year rise of 59.84%. The imports mainly included basmati rice worth $925 million, tea worth $65 million, sugar worth $64 million, other types of rice worth $59 million and bulk drugs and drug intermediates worth $37 million.
Bilateral trade hit $1.69 billion in 2021, with Iran’s export standing at $409 million and imports at $1.28 billion.
The comments made by Keshavarz came after the Indian English-language business-focused daily The Economic Times reported on Sunday that Iran has completely stopped signing new contracts for importing tea and basmati rice from India as of last week.
While there is no clarification from Iranian buyers about the reason for this sudden stoppage, Indian exporters believe this is largely because shops, hotels and markets in the West Asian country remain closed amid protests across the country, the report said, adding that “a section of the trade believes Iranian importers could be delaying purchases as New Delhi and Tehran are working out a rupee trade settlement agreement”.
The development will have an impact on the export of these commodities, particularly tea, as Iran imports around 30-35 million kg of orthodox tea and about 1.5 million kg of basmati rice from India every year, exporters said.
While tea exports to Iran had slowed down earlier, buyers from there “stopped registering new contracts from last week”, said Anish Bhansali, managing partner of Bhansali & Company, a leading tea exporter to Iran. “There is no clarity on why suddenly this has happened. We have asked the Iranian buyers but they do not have any clear answer. We have informed the Tea Board and we are waiting for some clarity,” he said.
While rice exporters, too, are facing the same problem, the impact would be less as rice exports have risen on high demand and rise in prices of commodities globally since the Russia-Ukraine war.
Keshavarz noted that, at present, Iran’s rice reserves are sufficient and the import ban will not cause any problems.
“Since the beginning of the current fiscal year [March 21], the private and public sectors have imported 921,000 tons and 223,000 tons of the grain respectively. But in the last few months of the year, as rice consumption rises, we plan to import around 400,000 tons,” he added.
Shaygan Adibi, the manager of the Agriculture Ministry’s “Rice Project”, says Iran’s rice production this year has exceeded 2.4 million tons to register a 30% rise compared with last year.
