India, the world's biggest rice exporter, is offering a steep discount to supplies from rivals Thailand and Vietnam to cut its surplus after a bumper harvest

Bangladesh is finalising a purchase of 150,000 tons of rice from India's NAFED, the New Delhi-based state agency told Reuters, in what would be the first such bilateral deal in three years after floods in Bangladesh sent local prices to a record high.

India, the world's biggest rice exporter, is offering a steep discount to supplies from rivals Thailand and Vietnam to cut its surplus after a bumper harvest.

"We are negotiating with Bangladesh," said a spokesman for NAFED (the National Agricultural Cooperative Marketing Federation of India Ltd). "NAFED is in a position to supply up to 500,000 tons rice to Bangladesh."

A senior official with Bangladesh's food ministry said they could buy 100,000 tons of parboiled rice and 50,000 tons of white rice under a government-to-government deal.

India could sell parboiled rice at around $407 and white rice at around $417 per ton on a cost, insurance and freight (CIF) liner out basis, an Indian government source said. The rates are about a third cheaper than those from Thailand and Vietnam.

The entire shipment is likely to be made in the first quarter of next year from the Haldia port in India's eastern state of West Bengal, which borders Bangladesh, the Indian government official added.

Both the Indian and Bangladeshi government officials declined to be named as details are still being worked out.

Representatives for the trade and food ministries of India and Bangladesh did not immediately respond to requests for comment.

Bangladesh, the world's third-biggest rice producer with an output of almost 35 million tons a year, relies on imports from time to time to cope with shortages caused by natural disasters such as floods or drought.

Its state grains agency issued its first rice purchase tender in three years in November to boost local supplies. The country of more than 160 million people could import as much as 500,000 tons of rice in the year to June.

"Bilateral deals will accelerate India's rice exports," said B.V. Krishna Rao, president of the Indian Rice Exporters' Association. "The government should try to seal more such deals as we have ample surplus for exports."