The Hindu Business Line : No UN certifying inspectors at ports — Exporters in a fix over Iraq-bound cargo

With no UN inspectors left at any of the ports of Iraq to certify cargo arrival, Indian exporters are concerned about the "financial risk" that the new situation may present on all their current shipments including in-transit shipments bound for Iraq.

According to industry estimates, Indian suppliers had in all bagged about Rs 4,500 crore worth of contracts (for different products) from Iraq over the last two years. At least Rs 1,000 crore worth of shipments are at various stages — awaiting clearance of the Indian port authorities, cleared by port authorities and bound for Iraq and already lying in the ports of Iraq awaiting approval of UN inspectors.

"We have asked the help of the Permanent Mission of India in the US to check with BNP of New York as to whether they will accept documents in respect of cargo whose arrival notices are not being stamped by UN inspectors, say in Umm Qasr port. The UN has asked their inspectors to leave the port," Mr Anil Agarwal, Co-Chairman, India-Iraq Joint Business Council, told Business Line after a meeting with Commerce and Industry Minister, Mr Arun Jaitley.

He pointed out that the UN would have to take a policy decision on allowing humanitarian supplies and posting their inspectors in either Aqaba port in Jordan or Tartous port in Syria. Both Jordan and Syria are neighbouring countries of Iraq.

BNP is the only designated bank authorised to issue letters of credit against contracts awarded by the Iraq Government.

Sources in the exporting community said larger companies may not "burn their fingers" as they will have some ECGC cover on their shipments. "Its small and medium enterprises that will have to face the music. The force majeure clause will help them only to a certain extent. It appears that the Food-for-Oil programme is now in limbo and awaiting adjustments. With the UN itself out of the picture, the status of the contracts is unclear," an exporter said.

According to Government statistics, India-Iraq bilateral trade in 2001-02 stood at about Rs 984 crore. India's exports to Iraq in that year stood at about Rs 983.07 crore and imports from Iraq stood at about Rs 19.57 lakh.

The main items of exports were machineries and instruments (Rs 381 crore), manufacture metals ( Rs 116 crore), tea (Rs 110 crore), electronic goods (Rs 32 crore) and pharmaceutical products and fine chemicals (Rs 34 crore).

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