India extends export benefits to rupee trade with Iran
Aug 10 2014 , New Delhi
"Export proceeds against exports to Iran realised in Indian rupees are permitted to avail exports benefits/ incentives under the Foreign Trade Policy, 2009-14, at par with export proceeds realised in freely convertible currency," the Director general of Foreign Trade (DGFT) has said in a notification.
Indian exporters mainly trade in freely convertible currencies including US dollar and euro. The government provides export incentives under different schemes, including Focus Market Scheme, to exporters realising their proceeds in such currencies.
Iran makes payment in rupees to Indian exporters after the Western countries imposed sanctions on it.
To increase bilateral trade, the government in April had also waived the value addition norms for exporters shipping imported items like food and pharmaceuticals to Iran.
Besides food products, India mainly exports to Iran pharmaceuticals, machinery, transport equipment, chemicals, man-made yarns and fabrics and steel.
The bilateral trade between the two countries stood at USD 15.25 billion in 2013-14.
India is one of the biggest oil importers from Iran.
Since February 2013, when the US blocked payment channels to Iran for its nuclear programme, India has been paying 45 per cent of its Iran oil bill in rupees through a Uco Bank branch in Kolkata.
India has steadily cut imports from Iran as the sanctions from US and other Western countries blocked payment channels and crippled shipping routes.
It imported 21.20 million tonnes of crude oil from Iran in 2009-10, which came down to 18.50 million tonnes in 2010-11 and 18.11 million tonnes in 2011-12.
Crude oil imports from Iran were reduced to 13.14 million tonnes in 2012-13, the year when the US had tightened screws on Iran.