India trumps Pakistan's Iran rice trade boom with oil rupee
DUBAI - Iran's oil export revenues are helping Indian rice exporters to claw back some of the lucrative business lost to cross-border truckers in Pakistan as a result of Western sanctions.
Indian rice exports direct to Iran have bounced back, thanks to shippers being paid up front in rupees from a huge pool of oil money owed to Iran by Indian refiners.
"Now business is being done directly because Iran is allowed to open letters of credit in Indian rupees because the government has to pay money to Iran for the oil," said Suresh Manchanda, marketing director of a Delhi-based company which exports rice, wheat and sugar globally.
"For the importers back in Iran, Indian rupees are easily available to them via the government, so they can do business in a much easier way than doing business in any other currency," Manchanda told Reuters at the Gulf Food trade show in Dubai.
"For all practical purposes the money never leaves anywhere, the money is already in India."
India is Tehran's biggest rice supplier but shipments were held up in early 2012 after Iranian buyers defaulted on payments. Many Indian suppliers then stopped sales on credit.