India sees in the US and European sanctions aga­inst Iran a lucrative and huge opportunity for our exporters. To seize this, the commerce ministry is sending a large business delegation to Iran at the month-end. It will include government officials too.

“We intend to continue doing business with Iran,” commerce secretary Ra­hul Khullar said.

The sanctions will have two direct effects on Iran that will interest India. First, the sources of supplies of all kinds of goods and services to that country will get limited. Since India does not honour the US and European sanctions, it will have a greater access to the Iranian market.

Second, as a result of rupee payments for some of the oil that India buys, Iran will have a huge cache of rupee funds and need to spend it also. All this could mean more Indian goods heading for Iran.

Among other things, the business delegation will explore market opportunities for pharmaceuticals, tea, wheat, rice, iron and steel, pipes and machinery. A huge portion of Iran’s machinery requirement is met from Europe, which may get nixed by the sanctions. This will pave way for Indian machinery equipment manufacturers to feed the Iran market.

“India honours UN sanctions which do not cover a large range of products. Food items and pharmaceuticals are excluded from the UN sanctions. Since the European Union and the US are walking out of Iran, we are now looking at grabbing this opportunity by expanding exports to Iran,” another commerce ministry official said.

Bilateral trade with Iran stood at $13.6 billion in 2010-11, with exports from India at $2.7 billion and imports from Iran at $10.9 billion.

Major exports from India include cereals, inorganic and organic chemicals, iron, steel and their products and tea, coffee and spices.

Oil constitutes over 90 per cent of India’s imports from Iran. Next come organic chemicals and ores. On Iran deferring payment for basmati rice and tea imports from India, Khullar said this was because payments were stuck in transit. “It is only a handful of exporters of rice and tea whose payment has got stuck because of a change in the payment mechanism. Exports through alternate channels have also led to a delay,” he added.

yogimassharma

@mydigitalfc.com