With US sanctions looming large over Iran for its nuclear programme, New Delhi is worried about its export basket not expanding to make use of the rising rupee payment.
The plan was agreed upon during prime minister Manmohan Singh's visit to Iran last year, but both sides are yet to sort out the quality issues so they can enter into a long-term arrangement for wheat export.
The quality issue is with regard to a fungal disease, known as 'Karnal bunt', in Indian wheat. Iran had stopped buying wheat from India in 1996 alleging high levels of Karnal bunt in grain.
India has subsequently argued that its wheat has internationally permissible levels of Karnal bunt and that Iran was using a similar yardstick of quality for wheat from USA.