Source: Iran Raises Import Duty on Indian Rice

Based on reports, the duty on Iran’s rice imports from India, mainly of the basmati variety, jumped from 22% to 40% in July.

Tehran’s decision has seemingly stirred unease among New Delhi officials, who fear the move could have a great impact on India’s basmati rice exports.

Iran is an important destination for India’s rice and constitutes about 30% of the Asian country’s total basmati rice exports, Indian sources say.

India is at the same time a big customer of Iran’s crude oil. In 2012, as Western sanctions disrupted dollar payments to Iran, New Delhi started settling part of its oil debt to Iran in rupees and Iran was using those to buy goods from India.

That trade in rupees gave India an edge over other rice suppliers such as Pakistan and Brazil who do not have such huge debts with Tehran and quickly the south Asian country established a near-monopoly in exports.

Now following a rise in import duty on India’s basmati rice, a senior official at the All India Rice Exporters Association (AIREA) said he believed the move is part of Iran’s attempts to gradually scale down imports and become self-sufficient in rice production.

But it would be a major blow to Indian basmati rice exports to Iran, he added.