Indian MPs are calling for an investigation into suspected letter of credit (L/C) irregularities caused by rice traders seeking to bypass restrictions on rice exports to certain locations.

Over the last two years, the Indian government has banned the use of L/Cs in the export of specific types of rice or to specific export locations in order to strengthen supplies in the domestic market.

However, restrictions on the sale of non-basmati rice to some African countries have been relaxed for humanitarian reasons.

Investigations

Opposition MPs are now clamouring for investigations into the alleged role of exporters who are accused of siphoning off rice meant for export to African countries on humanitarian grounds.

The MPs have specifically called for investigations into irregularities in L/Cs relating to transactions between Indian exporters and Ghana. The parliamentarians are calling for either a Central Bureau of Investigation probe or an inquiry by a joint parliamentary committee.

L/C problems

Several problems have been encountered in L/C-transacted rice deals made under the Indian government's restrictions.

In some instances, where L/C documentation appears to accord with government regulations, rice has reportedly been shipped to territories where the Indian government has banned sales of rice.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.