Economy, Business And Markets

India Proposes to Double Transactions With Iran

India Proposes to Double Transactions With Iran
India Proposes to Double Transactions With Iran

India’s Commerce and Industry Minister Suresh Prabhu on Friday proposed to double trade with Iran in the next five years from the current level of $13.8 billion, an Indian official said.

The official also said Prabhu’s scheduled visit to Tehran on October 2 has been postponed for some reasons. He was to attend the ministerial meeting of the International North-South Transport Corridor, Press Trust of India reported.

Ways to boost trade and investment between the two countries were discussed during a meeting between Prabhu and the visiting Iranian Minister of Roads and Urban Development Abbas Akhoundi in New Delhi.

The meeting assumes significance as the US has imposed sanctions on Iran. The US has also told India and other countries to cut oil imports from Iran to zero by November 5 or face sanctions.

After the meeting of the two ministers, Prabhu tweeted: “Our discussions were centered on expanding bilateral ties between India and Iran beyond the energy and security sectors.”

Federation of Indian Export Organizations President Ganesh Gupta had recently said the government needs to look into problems facing exporters shipping consignments to Iran in view of US sanctions.

Iran is India’s third-largest oil supplier after Iraq and Saudi Arabia. Iran supplied 18.4 million tons of crude oil between April 2017 and January 2018.

Trade between India and Iran increased to $13.8 billion in 2017-18 from $12.9 billion in the previous fiscal. However, India exports goods worth only $2.65 billion to Iran, while its imports stood at $11.11 billion.

Earlier on Thursday, Akhoundi said Iran would hand over the strategic Chabahar Port to an Indian company within a month for operation, as per an interim pact.

“Now, we are ready just to hand over the port (Chabahar) to the Indian company just to operate this in an interim agreement that already we had with Indian part for one and a half year,” he said.

Chabahar Port is easily accessible from India’s western coast and increasingly seen as a counter to Pakistan’s Gwadar Port located 80 km from Chabahar.

The first phase of Chabahar Port was inaugurated in December 2017 by Iranian President Hassan Rouhani, opening a new strategic route connecting Iran, India and Afghanistan bypassing Pakistan.

Chabahar Port is being considered as a gateway to golden opportunities for trade by India, Iran and Afghanistan with Central Asian countries, besides ramping up trade among the three countries in the wake of Pakistan denying transit access to New Delhi.

Under the agreement signed between India and Iran earlier, India is to equip and operate two berths in Chabahar Port’s Phase-I with capital investment of $85.21 million and annual revenue expenditure of $22.95 million on a 10-year lease.

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