Iran and India plan to enhance export ties by expanding the Export Guarantee Fund of Iran (EGFI) and Export Credit Guarantee Corporation of India (ECGC) and increasing two-way trade.
Farshid Ahmadi, head of the marketing department of EGFI who was in India for an official visit stressed the role of the EGFI in reducing the risk of trade and improving the status of exporters through mechanisms like providing insurance, guaranteeing funds and supporting businesses.
“There has been a $200 million increase in EFGI’s credit by the government which is noteworthy, he said.
Ahmadi considered problems related to banking transactions as a key stumbling block in the way of the two countries’ commercial interaction.
“We are hopeful that Iranian businesses can easily move their capital using the two countries’ banking systems after the lifting of the sanctions on Iran,” he said.
Iran and the six world powers reached an agreement in July to end a ten-year dispute over the country’s nuclear program in exchange of sanctions relief expected in early 2016.
An Iranian delegation headed by Valliolah Afkhami, deputy minister of industry, mines and trade arrived in India last Tuesday to explore ways to improve and expand bilateral commercial ties. A trade deal was signed by Afkhami and his Indian counterpart.
Agricultural and food products, medicine, meat, organic products and engineering services are main areas of trade to be explored with India.
A joint commission has been established tasked with finding new areas of two-way trade but seemingly is in need of backing from both governments.
Iran and India have had normal trade ties since ancient times and the nuclear agreement has raised hopes for expansion of ties.
Mining, industries of various sizes, oil and energy, agriculture and food products form the largest portion of trade relations. The fact that India’s economic growth is expected to surpass that of China in a few years, along with India’s population of more than 1.2 billion, augurs well for giving new impetus to bilateral trade.
India is also the second largest buyer of Iran’s oil after China and was the fourth biggest importer of Iranian non-oil goods in the last Iranian year (ended March 20). Iran exported $10.3 billion of non-oil goods to India while India’s non-oil exports to Iran stood at $4.3 billion. Basmati rice comprises a significant share of India’s exports to Iran, amounting to $2 billion in 2013-14.
Tehran proposed a preferential trade agreement with New Delhi when Afkhamirad met with Additional Secretary of India’s Ministry of Commerce and Industry Rajani Ranjan Rashmi in March. The matter resurfaced during the recent visit to Tehran by India’s Commerce Secretary Rajeev Kher.