EghtesadOnline: The Indian Cabinet on Wednesday cleared a double taxation avoidance agreement between India and Iran, which will promote investment flow and curb tax evasion.
The agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income between India and Iran was approved by the Cabinet, headed by Prime Minister Narendra Modi, an official statement was cited by Indian daily newspaper The Economic Times.
The agreement will stimulate flow of investment, technology and personnel from India to Iran and vice versa, and will prevent double taxation, the statement added.
"The agreement will provide for exchange of information between the two contracting parties as per latest international standards. It will thus improve transparency in tax matters and will help curb tax evasion and tax avoidance."
According to Financial Tribune, the Cabinet also gave an ex-post-facto approval for the MoU between India and Iran for cooperation in the field of agriculture and allied sectors. The MoU was signed in February during the Iranian President Hassan Rouhani’s visit to India. Under the MoU, a joint working group will be formed to monitor the activities carried to fulfill this MoU, The Hindu Business Line reported.
Another MoU between India and Iran, on cooperation in the fields of health and medicine, also got the Cabinet’s nod. This too was signed during Rouhani’s visit in February.
The MoU covers exchange in training of medical doctors and other health professionals, assistance in development of human resources and setting up healthcare facilities, regulation of pharmaceuticals, medical devices and cosmetics, and exchange of information among others.
An MoU between India and Iran in the field of traditional systems of medicine was also approved by the Indian Cabinet.
Iran and India signed a series of agreements during Rouhani's recent visit to India—his first since he came to power in 2013.
It was announced during the Iranian president's visit that India will start investing in Iran in rupees.
Indian investments in rupees will get converted into Iranian rial through banking mechanism allowing investments from India, including in the Chabahar Port complex.
Bilateral trade between India and Iran stood at $12.8 billion in 2017, according to Deputy Chief of Mission at the Embassy of India in Tehran Devesh Uttam.
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.
India is also a major client for Iran's oil.
"Last year, India imported 27.1 million tons of crude oil from Iran worth $9 billion," Uttam said.