Oil for rice: Punjab exporters call for barter deal with Iran amid trade disruptions

By Anju Agnihotri Chaba

With the war in West Asia disrupting India’s rice exports, exporters in Punjab have renewed calls for an urgent barter trade arrangement with Iran—proposing crude oil imports in exchange for rice shipments settled in Indian rupees—as a practical way to safeguard trade and reduce financial stress.

The demand has gained fresh urgency after rumours that a vessel carrying an Indian rice consignment was struck by a drone near Dubai port, triggering fears over the safety of shipments moving through volatile West Asian routes.

The Punjab Rice Millers Exporters Association (PRMEA), in a written representation sent to the Union Commerce Ministry on Thursday, highlighted that the ongoing geopolitical instability has severely disrupted India’s rice trade, particularly in the Gulf and West Asian markets that account for over 80 per cent of basmati exports.

Representatives warned that without immediate intervention, the crisis could spiral into a major financial setback for exporters dealing in high-value basmati rice. India exports over 6 million tonnes of basmati annually, valued at over Rs 55,000 crore, to more than 150 countries.

Ashok Sethi, director, PRMEA, said the recent unconfirmed reports of the drone strike have not only heightened risk perception but also raised serious concerns about cargo safety, insurance liabilities, and delivery timelines. Many consignments worth 60,000 tonnes are already stranded at ports or stuck at sea, with shipping schedules thrown off balance due to security concerns in the region, he added.

Exporters are also grappling with sharply rising logistics costs. Freight charges, marine insurance premiums, and port handling expenses have surged, significantly impacting profitability.

Exporters believe that a barter mechanism with Iran could serve as a dual solution—reviving a key export destination while simultaneously addressing India’s crude oil requirements. “This can stabilise exports, reduce payment risks, and ensure continuity in trade even during geopolitical uncertainty,” an industry source said, stressing that the move could cushion exporters against mounting losses.

Alongside the barter trade proposal, exporters have urged the Centre to implement urgent relief measures, including waiver of bank interest during the crisis period, financial subsidies to offset losses, protection and insurance cover for stranded consignments, and support to manage rising shipping and logistics costs.

PRMEA officials said the situation remains fluid and unpredictable, with each passing day adding to operational and financial pressure.

This article has been republished from The Indian Express.