India Sees Business Prospects Unlocked In Iran Post US, EU Sanctions (11-Feb-2012)
In the wake of sanctions imposed by the US and Europe, India sees a huge scope for boosting exports to Iran. India has decided to take its association with Iran a step further and explore the opportunities of trade that exist in areas affected by the sanctions imposed by other countries. Commerce Secretary Rahul Khullar has stated that India will be mounting a mission to Iran to promote its exports and a huge delegation will be visiting Iran at the end of the month.
The announcement also came ahead of a planned visit to India by Herman Van Rompuy, the European Union president, who is intending to seek the Indian government's help in pressing Iran to give up its nuclear program. Iran is currently facing sanctions over its 'doubtful' nuclear programme by the United Nations, US and EU countries.
However, India has refused to reduce its imports from Iran on the grounds that it will not be possible for India to substitute 110 million tonnes of Iranian crude per year from any other country. Also, India believes that the sanctions imposed by the US and EU - unlike those by the United Nations - are unilateral and, therefore, by giving a boost to trade with Iran, it is not violating any international norms. India however, honors the UN sanctions and has said that it will abide by those.
Further, Finance Minister Pranab Mukherjee, during his visit to the US recently, highlighted that India will not cut down its petroleum imports from Iran despite the sanctions by the US and Europe. He said, 'it is not possible for India to take any decision to reduce the imports from Iran drastically, because among the countries, which can provide the requirement of the emerging economies, Iran is an important country amongst them.'
India is keen to widen its exports to Iran as it feels that there are number of items which can be exported by India to Iran, which are not covered by the UN sanctions (which India has agreed to abide by). It is believed that huge export opportunities are available in sectors like food that include tea, wheat and rice; pharmaceutical; iron and steel; mining, medium-density fiberboard and infrastructure projects, worth at least an $8-billion, and there is no reason for India to not avail of these.
Bilateral trade between India and Iran is around $13.6 billion, of which Indian export is merely $2.74 billion. The main item of trade is oil, which accounts for 12% of India's total oil imports from Iran. Oil constitutes over 90% of India's imports from Iran, along with organic chemicals and ores. Major exports from India include cereals, inorganic and organic chemicals, iron, steel and their products and tea, coffee and spices.
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