Iran is reeling under sanctions of its financial sector and has problems in receiving payments of its oil exports. Earlier this year India decided to try to settle 45 percent of its oil trade with Tehran in Indian rupees, which are not fully convertible and globally traded. This would offer the opportunity to settle Indian oil payments without the involvement of foreign banks.
“Exports from the South Asian nation accounted for about $ 2.8 billion versus imports of about $ 11 billion in 2010/11, according to government data.” The trade would also offer advantages to India. After a bumper harvest it has problems stockpiling wheat in the producer regions in the North East of India and distributing them in the rest of the country.
The Indian government ended a four year old wheat export ban in September 2011.
India used to be a large wheat exporter to the Gulf until 2005, but has all but disappeared as a supplier since then. Productivity gains of the Green revolution fell behind population growth for the first time in the 1990s. Even with the recent bumper harvest it is unlikely that it will reconnect with this old role. Together with Pakistan it remains the major supplier of basmati rice to the Gulf region though.