India 'ready' to take benefits of sanctions against Iran

For India, sanctions against Iran are virtually turning out to be a boon in disguise.

After working out a rupee payment mechanism with Tehran, India’s exports to the West Asian nation are expected to take sharp jump touching six billion dollars in the next one to two years, experts here said. India currently exports goods worth 2.4 billion dollars to Iran.

“We are expecting huge jump in our exports to Iran in the next one to two years,” said Ajai Sahai, director general of the Federation of Indian Export Organisations. This was under the new arrangement being worked out between New Delhi and Tehran, he told reporters on the sidelines of an export promotion meet here.

Sahai said India could exports items like pharmaceuticals, auto components, soyabeen, wheat and rice to Iran in view of the US-led heavy sanctions. “The target of six billion dollars is realistic. We can achieve that,” he added.

India imports oil worth 13 billion dollars from Iran every year of which six billion dollars (45 per cent) would now be paid through barter trade where India will be exporting some items in lieu of getting oil from Iran. The UCO Bank in India and Persian Bank in Iran have been chosen as the nodal banks for the rupee payment mechanism, Sahai said.

For the rest of 55 per cent payments, talks are being held at different levels between New Delhi and Iran, Sahai said. “One option is that the rest of the 55 per cent payments can be paid in the form of gold. But the decision regarding payment through gold has not been taken yet,” he added.

According to the Industries Association of Uttarakhand (IAU), the huge gap of exports to Iran owing to sanctions can be filled by industries that have come up in Uttarakhand and Himachal Pradesh. A high-level business delegation from Iran is also expected to come to Uttarakhand to boost exports, said Pankaj Gupta, president of IAU.

The Iranian business delegation from Tehran Chamber of Commerce and Industry is expected to come in May this year, he said. “We will discuss in detail about the kind of items which they need and can be exported through Uttarakhand whose exports have now touched around Rs 4,000 crore in the last financial year (2010-11),” he added.