EghtesadOnline: Tehran Chamber of Commerce, Industries, Mines and Agriculture plans to hold a conference entitled "Reviewing Ways to Promote Iran-India Business-Economic Relations" on Feb. 17.
Organized with the aim of exploring solutions to current economic issues between the two sides, the event will host India’s Ambassador to Iran Gaddam Dharmendra, representatives from Iran’s private sector and businesspeople, the chamber’s website reported.
The conference will be held from 9:30 a.m. to 12:30 p.m. local time at the TCCIM headquarters, according to Financial Tribune.
Those interested in taking part can contact +9821-88719011 for more information.
India is one of Iran’s top trading partners.
India-Iran trade declined by a sharp 79.4% in the first eight months of the current Indian fiscal year (April to November) to $3.5 billion from $17 billion in the comparable period of last year after the lapse of the oil sanction waiver extended by the US to India.
Escalating tension between Iran and the US could hurt trade further, as India’s exports to Iran, which have sustained despite the economic sanctions, could now take a hit. This is true especially with the balance in the rupee-rial account running out, fear exporters, the Hindu Business Line reported last month.
Bilateral trade in 2018-19 posted a 23.7% growth to $17.03 billion. Of this, mineral oil and fuel imports were key, accounting for $12.3 billion.
While India's imports from Iran declined by 90.3% in the period to $1.29 billion because of reduction of petroleum imports to zero, the fall in exports was lower by 36% to $2.23 billion.
India's exports of cereals, including basmati, in the first eight months of the current fiscal, were valued at $648 million compared to $1.58 billion in the same period of last year, while tea, coffee and spices exports were worth $164 million compared to $189 million in the same period of the previous fiscal.
Tea exporters, so far, have been optimistic about their trade, as Iran bought a record 50 million kg of tea in January-December 2019 but are uncertain about the future.
“We are very happy with the Iranian market so far, but the recent war-like situation has us worried. We were planning a delegation to Iran in February this year, but are now not sure if that would be possible. We have written to the Commerce Ministry about it and are waiting for directions,” said Sujit Patra, secretary of Indian Tea Association.
Basmati exporters, too, are cautious about what the future holds.
“We are managing to export basmati to Iran despite some payment problems. But once the balance in the rupee-rial account gets exhausted, payments may stop. We are apprehensive that the increase in tension between Iran and the US could also affect transportation of shipments,” said a Delhi-based rice exporter.
The rupee-rial payment mechanism is a barter-like arrangement by the two countries to conduct trade without using international currencies like the dollar. Through this mechanism, payment for Iranian goods is deposited in a UCO Bank account in rupees and this money is used to pay exporters who supply goods to Iran.
With India forced by the US to stop purchase of oil from Iran since April this year, the balance in the rupee-rial account is drying up as oil was the chief item of import from the country.
“The balance in the rupee-rial account is not likely to pay for Indian exports to Iran beyond 3-4 months. The two governments have to look for alternative mechanisms to sustain trade and exports,” said Sahai.