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• The commerce ministry is sending a large official and business delegation to Iran towards the end of the month to explore new opportunitiesNew Delhi: India plans to raise exports to Iran as Europe and the US shun the West Asian country after imposing sanctions against the Islamic nation for its controversial nuclear programme, according to a senior commerce ministry official.The commerce ministry is sending a large official and business delegation to Iran towards the end of the month to explore new opportunities, said the official, requesting anonymity.
• “If the European Union (EU) and the US stop exporting to Iran, why shouldn’t we step in and grab the opportunity,” the official said.The US announced new sanctions in December that penalize any financial institution dealing with Iran’s central bank. The EU, too, has decided to ban oil imports from Iran. While the US and the EU are putting pressure on India to abide by the sanctions imposed by them, India has made it clear that it will only abide by the United Nations (UN) sanctions.
• UN sanctions do not restrict vast range of exports from India, the official said. “While we continue to boost our traditional exports of tea, wheat, rice, iron, steel and pharmaceutical products, we will push for market access in machinery as the EU and the US stop exporting such items to Iran,” the official said.India should pursue its economic and strategic interests in Iran, former secretary in the ministry of external affairs K.V. Rajan said. “Though we cannot substitute US and EU exports to Iran, we certainly should try to export more goods to Iran or else some other country will do so,” he said.India had a bilateral trade of $13.7 billion with Iran in 2010-11. While India exported goods worth $2.7 billion, it imported mostly oil worth $10.9 billion from Iran.
• Iran’s ambassador to India Seyyed Mehdi Nabizadeh said on Tuesday that both the countries have worked out a way for India to pay for Iranian crude oil, resolving an issue that had threatened to halt oil supplies from a key source.India imports around 400,000 barrels of crude oil a day, or 12-13% of its needs, from Iran.But payments have been a problem since last January after India decided to discontinue making them through the Asian Clearing Union (ACU) system. Since July, India has been paying for oil it buys from Tehran through Turkey, and was exploring the option of making payments through Russia.
• According to the new mechanism, India will pay 45% of the dues in rupees and Iran will use this money to pay for imports from its second-biggest customer, Nabizadeh said in New Delhi.“A mechanism has been found. One of the proposals was that part of the payments must be made in Indian rupees into Indian banks. This was proposed by India and we accepted this,” the envoy said, adding that both sides were “satisfied” with the 45% rupee payment.Iran would boost imports from India to utilize a part of the rupee amount, Nabizadeh said. “There was potential for India to widen its trade basket to include exports of iron, steel, machinery and equipment, besides agricultural products such as rice, and minerals, he said.
• Indian firms could look at investing in projects in Iran including gas-to-liquid plants, mining, roads and railway infrastructure, and developing oil and gas fields, according to Nabizadehd.Iran had opened accounts in India’s UCO Bank and “two or three other banks” for this purpose, he said.There was also the possibility of Iran opening up branches of its own banks in India, the envoy said.The two countries will find a mechanism to make the remaining 55% payment, he said. On reports that India could use gold to pay for oil imports, Nabizadehd said, “We can accept (this), but gold is not a suitable mechanism.”
• In January, finance minister Pranab Mukherjee was cited by news reports as saying that “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’s relationship with Iran is neither inconsistent with its non-proliferation objectives, nor is it in contradiction with the relationships that it has with its friends in West Asia or with the US and Europe, foreign secretary Ranjan Mathai said on Monday.“Iran is our near neighbour, our only surface access to central Asia and Afghanistan, and constitutes a declining but still a significant share—currently under 10%—of our oil imports,” Mathai said in a speech at the Centre for Strategic and International Studies in Washington.“For us, there are also broader and long term geo-strategic concerns that are no different from what we face elsewhere in the Asia-Pacific region,” Mathai said.

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