Economy, Business And Markets

Tehran, New Delhi Get Down to Brass Tacks

Tehran, New Delhi  Get Down to Brass TacksTehran, New Delhi  Get Down to Brass Tacks

The 18th session of the India-Iran Joint Commission was held in New Delhi on Monday with the participation of India’s External Affairs Minister Sushma Swaraj and Iran’s Economy Minister Ali Tayyebnia, who is leading a trade delegation to India.

The two ministers reviewed the progress in trade and economic cooperation and discussed connectivity projects, including the International North-South Transport Corridor and possible Indian cooperation in Chabahar-Zahedan-Mashhad rail line.

As the Indian newspaper Economic Times reported, the credit ceiling of the Export-Import Bank of India to Iran has risen to about $1 billion from $150 million, of which $250 million will be spent on purchasing rail tracks and related equipment from India.

About $750 million of the credit line can be spent for the implementation of projects in Iran.

The meeting was the first between the two countries since the July 14 nuclear deal between Iran and world powers, which will soon see the lifting of western sanctions on Iran in return for Tehran limiting its nuclear program.

It revolved around measures to expand economic and strategic partnership, including increasing oil exports from Iran to India, disbursing pending oil payments and New Delhi investing in Iran’s hydrocarbon sector.

Before the sanctions imposed on Iran, Tehran was meeting 16% of New Delhi’s oil needs, which figure has now reached 6%.

  Chabahar Project in Limelight

Another key highlight of the session was the development of Iran’s southeastern Chabahar Port. India is rushing to conclude a deal with Iran to build two berths at the strategic Chabahar Port as Tehran edges closer to ridding itself of crippling economic sanctions and woos New Delhi’s rivals like Beijing.

India’s Transport minister Nitin Gadkari visited Iran in April to ink a memorandum of understanding on the Chabahar project. But India needs to conclude a contract with Iran, based on the MoU, to seal the deal.

The lifting of sanctions against Iran would make it easier for a slew of countries to do business with the country and India is worried China could step in if it sits on its commitment to Tehran.

Economically, the port would open up a trade-and-transit route connecting up with the International North-South Transport Corridor piloted by Russia, impacting New Delhi’s trade with not just Tehran but also with Moscow.

The berths at Chabahar would also allow India a route to trade with Afghanistan bypassing Pakistan. India has asked Pakistan and Afghanistan to extend their trade-and-transit agreement to India, but Islamabad remains reluctant.

This is the second high-level visit from Iran to India since the nuclear deal. Iranian Foreign Minister Mohammad Javad Zarif was in India back in August.

Swaraj said India considers Iran an important partner and expressed satisfaction at the growing bilateral interaction.

She underlined the efforts underway to enhance bilateral economic cooperation in energy, trade, commerce and infrastructure, including shipping, ports and railroads.

Tayyebnia proposed the participation of India’s public and private sectors in the development of Chabahar Port and Free Trade Zone and in setting up industrial units there.

  Meeting With Modi

Earlier on Monday, Tayyebnia called on Indian Prime Minister Narendra Modi, who warmly recalled his meeting with Iranian President Hassan Rouhani on the sidelines of the Shanghai Cooperation Organization summit in Ufa, Russia, back in July and reiterated the keen desire of India to expand its economic cooperation with Iran.

Premier Modi expressed readiness to further strengthen bilateral relations with Iran, including in the areas of trade, investment, oil and gas, connectivity and port development.

According to the Indian daily The Telegraph, the Iranian minister’s visit was a key part of a fresh thrust by the Modi government to ensure it corrects a perception in Tehran that New Delhi remains slow and non-committal on key strategic and infrastructure projects.