NEW DELHI, June 19: India, sitting on huge grain stocks, hopes to sell wheat to Pakistan if a thaw in relations between the nuclear-armed neighbours translates into better trading ties, officials said on Thursday.

“Pakistan can be a new wheat market for us and we can offer competitive prices,” said Gagan Gulati, a leading exporter.

Officials say trade could pass $1 billion a year from the current $200 million and grow about 15 per cent annually if relations improve. The two nations had prospects of trading in sugar, tea and cotton, apart from industrial goods, they said.

“We are sitting right next to Pakistan and we have a rail link, grains can be moved in very little time,” an official of the Punjab State Marketing Federation (Markfed) said from Chandigarh.

“But all will depend on how the two nations move towards peace.”

Markfed, based in the leading wheat-producing Punjab state, is India’s second-largest wheat exporter.

Relations between the neighbours have thawed since Indian Prime Minister Atal Behari Vajpayee opened the door in April to talks on disputed Kashmir, a region over which they have fought two of their three wars since independence in 1947.

The two sides have since decided to resume full diplomatic ties and air, rail and bus links.

Indian grain exporters said Pakistan would need wheat around October when domestic supplies shrink.

“If the peace moves by both countries remain on track then we can supply wheat to Pakistan in October through the Punjab border,” a Bombay-based trader said.

India started exporting wheat two years ago to cut huge stocks accumulated due to good harvests.

It sells 300,000 to 400,000 tons a month to the Philippines, Vietnam, Indonesia, South Korea and countries in Africa and the Middle East.

As of March 31, government agencies held 32.81 million tons of total grain stocks, nearly double the buffer level of 16.8 million tons.—Reuters