India Plans First Reverse SEZ in Iran

India Plans First Reverse SEZ in Iran
India Plans First Reverse SEZ in Iran

The first reverse SEZ (special economic zone) project, a concept through which Indian chemical and petrochemical companies will be encouraged to set up plants in other countries to manufacture basic raw materials, is likely to come up in Iran, said Ananth Kumar, union minister for chemicals and fertilizers, Business Standard reported.

Ananth Kumar added that the talks are in initial stages. The ministry has prepared a white paper for the reverse SEZ and is also involving finance minister and external affairs minister in this process.

According to government sources, when the concept of reverse SEZ was first floated, Iran, Myanmar and Mozambique were front runners as these countries have abundance of oil and gas resources, a key feedstock for petrochemicals and petroleum industry. Now, the Indian ministry believes that Iran could be an ideal place to start reverse SEZ project since many refineries in India already import crude from Iran and have working business relationship with Iranian companies.

Ananth Kumar said through reverse SEZ Indian companies can have excess to low-cost feedstock to make petrochemicals, which than can be imported into India for downstream industries.

According to Ghomalreza Ansari, Iranian ambassador to India, Iran offers unique investment opportunities to Indian companies as it has abundance of energy resources and is also closer to India.

India's Vice-President Hamid Ansari had said earlier in September: “Iran’s hydrocarbons complement India’s energy need,” adding that there are three specific considerations reflective of it: “Iran’s location on the Persian Gulf, its vast supplies of hydrocarbons and the country’s location on the western borders of Pakistan and Afghanistan.”