EghtesadOnline: Tehran is hosting an Indian exhibition called ‘Source India’ that opened at Milad Tower on Saturday and will conclude on Monday.
“This is perhaps one of the largest business events happening after the very successful state visit of the President of Islamic Republic of Iran, His Excellency Dr. Hassan Rouhani to India,” Deputy Chief of Mission at the Embassy of India in Tehran Devesh Uttam told Financial Tribune in an interview at the expo.
Rouhani’s visit to India from February 15 to 17 this year, his first state visit to India, revolved around furthering economic engagement between the two countries.
A series of agreements were signed during the visit, including one on avoidance of double taxation and another to lease the operation of Iran’s Shahid Beheshti Port at Chabahar to India for 18 months, according to Financial Tribune.
‘Source India’ is organized by Trade Promotion Council of India in association with the Embassy of India in Tehran. TPCI is the premier trade and investment promotion body of India.
The exhibition is supported by India’s Ministry of Commerce and Industry and co-organized by Chemicals & Allied Products Export Production Council, known as CAPEXIL and Assocham India.
“The idea of ‘Source India’ is to bring Indian businesses into a market where we see there are a lot of opportunities for bilateral trade, investment and partnership. That is the main objective behind ‘Source India’,” TPCI Director Sadip Das told us on Saturday.
According to Uttam, more than 100 Indian companies from various sectors, including engineering, machinery, food, information technology, rubber and plastic are participating in the event.
“Bilateral trade between India and Iran stood at $12.8 billion in 2017,” Uttam said.
“We are very hopeful that such events like ‘Source India’ exhibition will help in boosting our bilateral trade.”
According to the Islamic Republic of Iran Customs Administration, Iran exported over 9 million tons of non-oil commodities worth $2.48 billion to India during the 11 months to Feb. 19, registering an increase of 5.8% in tonnage and a minor decrease of 1.2% in value year-on-year.
During the period, Iran imported 1.54 million tons of Indian goods worth $1.94 billion, up by 12.9% and 15.7% in tonnage and value respectively YOY.
Uttam explained that the energy sector is one of the key areas of cooperation between India and Iran, such that last year, India imported 27.1 million tons of crude oil from Iran worth $9 billion.
The Indian official emphasized that the leaders of both countries want to expand trade relations and there is need to diversify commodities exchanged.
According to Uttam, Iranian and Indian businesspeople can easily carry out transactions as six Iranian banks are linked with UCO Bank in India.
New Delhi has recently announced that India will henceforth invest in Iran through its own national currency rupee to bypass any trouble arising out of impending US sanctions against Iran, which bars the country from dealing in dollars.
The Indian investments in rupees will get converted into Iranian rial through the banking mechanism that allows investments from India, including in the Chabahar Port complex.
India, which has started operating Chabahar Port on Iran’s southeastern coast as a way to gain access to Afghanistan, is helping expand the port complex, which will be Delhi’s gateway to Central Asia and beyond.
New Delhi aims to develop the port on Iran’s southeastern coast as a way to gain access to the markets of Central Asia as well as Afghanistan by bypassing Pakistan. The port is about 72 km from the Pakistani port of Gwadar, which China is developing.
The plan is for India to equip and operate two berths in the port with a capital investment of around $85 million on a 10-year lease.
Indian Prime Minister Narendra Modi has said the government could spend up to $500 million on the port, India’s first major overseas port venture, as it tries to offer alternatives to China’s One Belt, One Road initiative to build trade and transport links across Asia.
Rouhani inaugurated the first phase of Chabahar’s Shahid Beheshti Port in the southeastern province of Sistan-Baluchestan in December.
Chabahar is Iran’s only oceanic port town and consists of two separate ports named Shahid Kalantari and Shahid Beheshti. The opening of the first phase of Shahid Beheshti Port (out of five phases defined for the project), which has tripled its capacity to 8.5 million tons (equal to that of all the northern ports of the country), will allow the docking of super-large container ships (between 100,000 DWT and 120,000 DWT) and increase India’s connectivity with Afghanistan.
During Modi’s visit to Tehran in 2016, a trilateral agreement on transit and transport was signed between India, Iran and Afghanistan, mainly focused on Chabahar.