Iran asks India to lower prices of rail tracks

Emboldened by prospects of West lifting years of sanctions, Iran has asked India to lower prices of rail tracks it had offered to supply in a tender.
Last year, India signed a contract worth USD 233 million with Iran to export rail tracks by companies including SAIL Ltd through State Trading Corporation (STC).
But after the recent initial nuclear accord it reached with US plus five Western powers, Tehran last month told India to lower the price, officials said.
With lifting of the sanctions leading to several companies wanting to do business with Iran, the Persian Gulf nation has begun tough negotiations on all its existing deals.

"The deal value may definitely come down. Prices of all commodities including steel and iron ore are declining so obviously prices will be lower than what it was set one year back," an official said.
The initial accord with the six major powers is to to be converted in a final agreement by June end after which US sanctions, that prohibited countries from investing in Iran for its suspected nuclear programme, may be lifted.

Iran has sought cooperation of India on expanding its rail network. During a visit of Commerce Secretary Rajeev Kher to Tehran, both the sides have discussed ways to increase cooperation in the railways sector.

Iran has high ambition to develop its railway infrastructure and India has strength in it. Iran also wants to buy rail wagons from India.
Another source said: "India is likely to cut the price of rail tracks as Iran has said it will pump USD 8 billion in its railway expansion programme and India would want its companies to become a part of the project."
Besides, due to the decline in consumption in China and other countries, the prices of steel are down and India would not want other producers like China and Turkey can jump on the deal quoting lower prices.

According to reports, Iran needs about 3 million tonnes of steel rails to connect all major cities, industrial centres and also ports for faster evacuation of goods.