Iran’s trade with India fell 6.19% during the first two months of 2023 compared with the same period of last year to stand at $358 million, latest data released by the Indian Ministry of Commerce and Industry show.
Iran’s exports stood at $134 million during the period, registering a 90.89% year-on-year rise.
The exported goods mainly included petroleum products worth $52 million, dye intermediates worth $40 million and fresh fruit worth $28 million.
Iran’s imports from India during the period stood at $224 million, registering a year-on-year decline of 34.31%.
The imports mainly included rice worth $134 million, fresh fruit worth $12 million, tea worth $9 million and organic chemicals worth $6 million.
Bilateral trade hit $2.5 billion in 2022, with Iran’s export standing at $653 million and imports at $1.84 billion.
Converging Interests in Trade, Connectivity
New Delhi and Tehran have converging interests in trade and connectivity, according to The Diplomat.
Iran’s full membership in the Shanghai Cooperation Organization, where India is also a member, could accentuate mutual efforts to focus on connectivity projects like Chabahar Port, which links India with the International North-South Transportation Corridor.
Since India began operations at Shahid Beheshti Terminal of Chabahar in late 2018, it has handled bulk cargo transshipments from Australia, Bangladesh, Brazil, Germany, Russia and the UAE.
Experts say the throughput can be significantly enhanced, if the port is linked to the rail network.
India took up the development of Shahid Beheshti Terminal under a tripartite agreement on Chabahar signed with Iran and Afghanistan in May 2016. Afghanistan is effectively no longer part of the arrangements since the takeover of the country by the Taliban last year, though the port has benefited from a US waiver on sanctions imposed on Iran.
India pledged to invest $85 million in the terminal and has so far supplied cranes and other equipment worth $24 million. The people pointed out there is a need to expedite the supply of more equipment such as heavy gantry cranes for transferring cargo from ships to land.
India and Iran are close to striking a long-term agreement for operations at the strategic Chabahar Port, with the matter held up only by differences on a clause related to arbitration, Hindustan Times reported recently, citing people familiar with the matter.
The long-term agreement, valid for a period of 10 years and to be extended automatically, is meant to replace an initial pact that covered India’s operations at Shahid Beheshti Terminal and has been renewed on an annual basis.
The move comes at a time when China has been showing growing interest in investments in ports and other coastal infrastructure in Iran, and the Iranian side has been pressing New Delhi to step up development of Shahid Beheshti Terminal, which is operated by the state-run India Ports Global Limited.
The long-term agreement figured in discussions during the Indian Shipping and Waterways Minister Sarbananda Sonowal’s visit to Iran in September, especially his meeting with Iran’s former roads and urban development minister, Rostam Qasemi.
The issue holding up the long-term agreement is not major and relates only to jurisdiction for the arbitration of differences on related matters, the people said.
Under Iran’s Constitution, such arbitration cannot be referred to foreign courts, and a proposal under the agreement would require a constitutional amendment, which would be difficult, they pointed out.
Both sides, however, are hopeful of the speedy resolution of this matter, as legal and technical experts are working on it, the people said.
At the same time, the Iranian side has been pushing India to speed up the development of its operations at Chabahar Port, including the completion of the 700-km Chabahar-Zahedan railroad.
