Pakistan and India are considering a barter trade arrangement for various commodities, Indian Commerce & Industry Minister Kamal Nath said on Wednesday.
The proposal comes as India is scouting international market for wheat, its sugar exports to Pakistan are on a rise and is also trying to accelerate tea exports to its north-western neighbour. "There is a whole basket of commodities we can offer to each other, but talks are at a very initial stage," Nath said.
The commodities that could be bartered include wheat, sugar, cotton yarn and molasses. India's flour mills are open to wheat import from Pakistan in exchange for commodities such as sugar.
"It is a very good proposition and will benefit both countries," said Prem Gupta, President, Roller Flour Mills Federation of India. Delivery time and cost of transportation will be lower and precious foreign exchange will be saved in barter deals.
Initial estimates indicate India's wheat output will be only 72 million tons in current calendar year, when consumption is likely to be 75 million tons, Gupta said.
Traders said, based on current international prices, India can barter a metric ton of sugar for more than 2.5 tons of imported wheat.
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