India and Iran to escalate trade ties amid US pressure

New Delhi: While the US is pressuring India to reduce its trade and commercial links with Iran, Commerce and Industry Minister Suresh Prabhu has proposed to double bilateral trade with Iran in the next five years from the current level of $13.8 billion.

Sources from the Ministry stated that Prabhu's scheduled visit to Tehran on 2 October has been postponed for some reasons. He was to attend the Ministerial meeting of the International North South Transport Corridor.

Ways to boost trade and investment between the two countries were discussed during a meeting between Prabhu and Iranian Minister of Road and Urban Development, Abbas Ahmad Akhoundi here.

The meeting assumes significance as the US has imposed sanctions on the Persian Gulf country. The US has also told India and other countries to cut oil imports from Iran to zero by 4 November or face sanctions.

After the meeting of the two ministers, Prabhu tweeted: "Our discussions were centered on expanding bilateral ties between India and Iran beyond the energy and security sector."

Officials said the Minister assured Iran on continuing strong economic ties as the two countries have a historical relationship and reiterated New Delhi's stand that it abides by UN sanctions only.

Federation of Indian Export Organisations (FIEO), president, Ganesh Gupta had recently said the government needs to look into the problems being faced by exporters shipping consignments to Iran in view of the US sanctions.

Iran is India's third-largest oil supplier after Iraq and Saudi Arabia. Iran supplied 18.4 million tonnes of crude oil between April 2017 and January 2018 (first 10 months of fiscal 2017-18).

Bilateral trade between India and Iran increased to $13.8 billion in 2017-18 from $12.9 billion in the previous fiscal. However, India's exports goods worth only $2.65 billion to that country, while the imports stood at $11.11 billion.


Tehran said it would hand over the Chabahar Port to India for operation and maintenance within a month. The port provides India a crucial transport link to Afghanistan and Central Asia, bypassing Pakistan.

Iranian Minister of Roads and Urban Development Abbas Akhoundi, in New Delhi for the Global Mobility Summit, said a contract for handing over the port to India had already been signed and things were moving forward at a good pace.

"We think the Chabahar Port will be handed over to the Indian authorities within one month. It is already operating and will be handed over for management and operational purposes," he said.

India is hopeful that the Chabahar Port would be kept out of the sanctions regime by Washington as its development was primarily aimed at providing humanitarian assistance to Afghanistan.

Asked about the position Washington had taken on India’s ties with Iran, Akhoundi said, "India-Iran relationship is essential for the region and we are looking at ways to work together. The US is an outsider in the region, so the insiders should come together and continue their friendship."


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