India needn’t be all that anxious about Iran’s default on payments for rice imports, as neighbouring Iraq is set to boost its own imports of premium quality aromatic rice from the world’s third-largest exporter of the grain.With the value of rice exports to the once war-torn country tripling to $28m in the past three years, Indian industry members told beyondbrics they were very optimistic about Iraq’s potential as an export destination, in spite of the often precarious security situation there.

“Iran and Iraq are both large importers of Indian rice, but Iraq is now emerging as an excellent destination for Indian basmati [long-grain] rice,” said Vijay Sethia, president of the All-India rice exporters association. “Though Indians sitting far away may have a feeling of fear after the war there, it is in fact Iraqi traders who are approaching us with trade offers, advance payments, etc.”

Most of the rice going into Iraq – 1.5m tonnes annually – goes via the free port of Dubai. As direct trade between India and Iraq picks up, Indian exporters are confident they will double their current share to 16 per cent of Iraq’s total rice imports within the fiscal year.

But rising exports to Iraq have less to do with its neighbour’s sanctions-induced woes than with worldwide demand for a new high-quality variety of the Indian specialty. But catching up to Iran in the volume and value of basmati imports remains a long way off, Sethia said.

“There is a new, premium variety that is replacing other basmati varieties and building a large consumer base not only in Iraq, but also worldwide,” he said. “I can’t make a comparison between the two – Iran and Iraq. What I will say is, Iran won’t further expand Indian imports, but… the way Iraq is opening up to India, in the next two years, Iraq will be a very large partner for us.”