Economy, Business And Markets

India Oil-for-Steel Deal Denied

India Oil-for-Steel Deal DeniedIndia Oil-for-Steel Deal Denied

The head of the executive board at the Iranian Mines & Mining Industries Development & Renovation (IMIDRO) has denied reports on a recent decision to import Indian crude steel and steel products in exchange for the oil money New Delhi owes Tehran.

Mehdi Karbasian, also the deputy minister of industry, mine, and trade, told Tasnim news agency on Friday that he was totally unaware of any decisions regarding the oil-for-steel decision.

The Iran Steel Producers Association (ISPA) recently warned that the domestic steel industry will incur huge losses if Indian and Chinese crude steel and other steel products were to be imported under the current low import tariffs, especially in a situation where the steel market is going through gloomy days in terms of both supply and demand.

Earlier, Reuters had quoted informed Indian sources that the country had started negotiations aimed at paying off its overdue debts by exporting steel to the Islamic Republic.

Following months of stagnation in the domestic steel market, the steel manufacturers expect the administration to impose higher tariffs on imports of steel and steel products. Steel market experts believe the administration should think of tariffs that result in fair prices, both for the consumers and the producers. They also say a separate tariff rate must be imposed on imported crude steel and steel products.

Last week’s reports said the National Iranian Oil Company (NIOC) had proposed the payment mechanism in August, potentially opening a new way to release oil export proceeds tied up in India under western sanctions against Iran’s economy over Tehran’s nuclear energy program. According to industry and government sources, and letters reviewed by Reuters, Essar has asked the Indian government to free it from paying its share of oil dues to Iran, and instead offset them against a $2.5 billion deal to supply steel plate to a NIOC affiliate.