Business And Markets

India Bank May Reconsider Plan to Cut Ties With Iran

UCO Bank of India may reconsider cutting ties with Iranian banks following the victory of Joe Biden in the US presidential elections and an anticipated change in Washington’s Iran policy, Parham Rezaei, the deputy chief of Iran-India Chamber of Commerce said. 
"The Indian bank had decided to stop working with Iran’s banks from next week due to the fresh US sanctions against the banking sector. However, given the results of the US vote the lender may rethink," the chamber's website quoted him as saying on Saturday. 
He recalled that UCO in the past has revised its decisions about cutting ties with Iran. 
UCO's move will not have a major impact on Iran-India bilateral trade as "Iran's oil export to India has dropped considerably in the past year.” 
After sanctions were announced long back on Iran over its nuclear energy program, both nations had agreed in 2012 that 45% of India’s oil import bills to Iran would be paid in rupees and deposited in UCO Bank because it had little or no exposure to business with the United States or its European allies.
"The bank used to handle 60-70% of the total transactions between Iran and India."
Rezaei noted that Iran's assets with UCO Bank are not blocked and can be used to import food and medicine. 
Indo-Iran trade was hurt after Donald Trump withdrew the US from the Joint Comprehensive Plan of Action in 2018 and announced tough new restrictions on key Iranian sectors, namely banks, insurance, shipping, auto and other key industries. 
The impact on two-way trade was more pronounced after India’s pro-US right-wing BJP government stopped buying Iranian oil in 2019. 
In 2018-19, bilateral trade was near $17 billion (largely oil imports). In April 2019 to November 2020, bilateral trade was said to be $3.5 billion. There was a significant drop in Iran’s imports from India because Iranian oil exports to India was zero.

Add new comment

Read our comment policy before posting your viewpoints