Iran slows down tea and basmati rice import from India.

KOLKATA: While the neighbour is not picking up tea from India because it has enough stock back home, it increased the import duty on basmati rice from 22% to 40% on July 23, giving a blow to Indian exports.

Talking to ET, CS Bedi, chairman of Rossell Tea, said: "Iranian buyers generally come to buy tea in June-end and early July . They were following this pattern for the past two years. This year, they are yet to come though there are enquiries from the country. The reason may be that Iran has enough stock as it had lifted a good amount of orthodox tea in the past year. They may come late this time."

Rossell Tea is one of the leading orthodox tea producers in India.

India exported 25 million kg of orthodox tea to Iran in FY14. "We are expecting Iran to buy Indian tea from August onwards," said AN Singh, chairman of Indian Tea Association. India's total exports in FY14 were 225 million kg.

For basmati rice exporters too, business with Iran does not seem to be bright this time. Iran is a major buyer of basmati rice and in FY14 the West Asian nation had imported 14 lakh tonne basmati rice. India's total exports of basmati in FY14 were 38.7 lakh tonne.

The rise in import duty to 40% will serve a major blow to Indian exports to Iran. "It will definitely impact exports of basmati rice to Iran, which is gradually discouraging imports of rice and trying to become self sufficient," said a senior official of the All India Rice Exporters Association (AIREA).

In addition to the higher import duty, the Islamic nation has also introduced a new set of standards for imports. Vijay Sethia, ex-president of AIREA, said: "Iran has revised the accepted level of arsenic in basmati rice from 120 ppb to 80 ppb (parts per billion). Due to this change, basmati exports to Iran may have temporarily slumped."

"Iranian buyers want the source to be properly validated and also they want different kinds of certificates to ensure that the arsenic level is less. They have also suggested that the rice imported from India will be tested in their laboratories. It will take some time to put the system in place. But once everything is in order, imports will start picking up," he added.

However, it is not clear when will shipments to Iran will pick up. It is likely to happen eventually as Pakistan, the only other supplier of basmati-type rice to Iran, has lower stocks and has no formalised barter trade system with Iran.

Source : economictimes.indiatimes.com