A big business delegation from Iran Chamber of Commerce will explore further investment opportunities in India and fresh financial and banking breakthrouhs accompanying the Iranian foreign minister on Monday in his visit to one of Asia’s rising powers.
The delegation, headed by Gholam Hossein Shafei, President of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA), is comprised of authrities of the Iran-India Joint Chamber of Commerce, dozens of producers of auto spare parts, pesticide and petrochemical products, pharmaceutical companies and other businessmen that have been actively trading with India.
On Tuesday (7 January) ICCIMA President Shafei is expected to meet Confederation of Indian Industry (CII) President, Rakesh Bharti Mittal, head of Federation of Indian Chambers of Commerce & Industry as well as India's trade minister. They are expected to examine the hurdles in the way of their bilateral trade, work to remove them in a bid to facilitate mutural commerce.
The Iranain private sector delegation also expects to sign a Memorandum of Understanding (MoU) with the Condeferation of Indian Industry that seeks to ease Iran-India economic cooperation. Shafei is also expected to ask the Indians to form an India-Iran Joint Chamber of Commerce that will further develop the two countries' commerce.
On the sidelines of the official ICCIMA meetings, the Iranain business representatives are scheduled to hold bilateral talks with their Indian counterparts in New Delhi.
Tehran also wants to finalise the Preferential Trade Agreement (PTA) with New Delhi that paves the way for a later trade agreement
Iran foreign minister is also expected to chair the India-Iran Business Round Table at the CII on Tuesday (7 January) as he did in 2016.
Zarif presided over India-Iran Business Round Table in CII in 2016 (Photo: cii.in)
Raisina Dialogue 2019: A World Reorder
Iran Foreign Minister, Mohammad Javad Zarif, will travel to India in a bid to take part in "Raisina Dialogue 2019: A World Reorder"; a three-day (7-10 January) high-level event where world policy-makers and thinkers alike will address the forum. The event, an initiative of India’s Foreign Ministry that started in 2016, will take place in New Delhi.
A screenshot of Raisina Dialogue tweet confirming presence of Iran Foreign Minister Zarif at event
Zarif will be the last speaker of the second day (Wednesday, 8th) that will deliver a 20-minute speech (1840-1900). He will speak after the Spanish Foreign Minister, Josep Borrel and a panel that will discuss how the West can find its new self in a “world that is relentlessly shifting eastward,” according to the conference’s programme.
A screenshot of Raisina Dialogue 2019 programme, showing Zarif's tiemtable on second day (Wednesday, 8 January)
The head of Iranian diplomacy is also expected to meet his Indian counterpart, Sushma Swaraj, as well as Indian Prime Minister, Narendra Modi. The sides are supposed to talk about easing the financial transactions between the two countries following the restoration of US sanctions that took effect 5 November.
Iranian oil and payment systems
As the new year kicked in, the South Asian nation said it will clear Iran oil payment in its national currency rupee quitting a hefty 42.5% withholding tax, Reuters reported.
The new solution will allow Indian refiners to settle about $1.5 billion of outstanding payments to National Iranian Oil Company (NIOC) and in the meantime Iran will be able to use the rupee funds for a range of expenses - including imports from India, the cost of its missions in the country, direct investment in Indian projects, and its financing of Iranian students in India, according to another government document reviewed by Reuters. It can also invest the funds in Indian government debt securities.
Tehran can also use the escrow to invest in India's Channai refinery. “Iran has always been positive with this (the new rules). I think they should be able to invest,” Indian Oil’s chairman Sanjiv Singh told Reuters, following a media conference on Wednesday.
Chennai Petroleum plans to invest up to 356.98 billion rupees ($5.1 billion) to replace the 20,000 bpd Nagapattinam refinery in Southern Tamil Nadu state with a 180,000 bpd plant.
Naftiran Intertrade, the Swiss subsidiary of National Iranian Oil Company, holds a 15.4 per cent stake in Chennai Petroleum, while Indian Oil has about a 52 percent share.
India keeps buying oil from Iran under a US six-month waiver. Continued supplies is crucial for the South Asian country that imports nearly 80 percent of its annual crude requirement, as Tehran offers better credit terms than other Middle East oil producers and, in the past, has accepted payments in Indian rupees, rather than U.S. dollars. New Delhi purchased crude worth about $9 billion from Iran in the financial year ended March 31, according to Bloomberg.
Chabahar Port & non-oil trade
Tehran and New Delhi have been eager to push their non-oil trade as well. Iran traded 7.17 million tons of non-oil commodities worth $3.18 billion with India during the first eight months of the current fiscal year (March 21-Nov. 21), latest data released by the Islamic Republic of Iran Customs Administration show, according to Financial Tribune.
India has been expanding the strategic south-eastern Iranian port of Chabahar that will help New Delhi to bypass Pakistan to send its exports to Afghanistan. It will also link the South Asian nation not only to Central Asia but also Europe. Without access to Chabahar, Afghanistan would be forced to depend solely on Pakistan for a sea passage.
India has invested up to 500 million dollars to complete constructing Chabahar that is Iran’s only oceanic port. 25 December Indian firm India Ports Global Limited on Monday took over the operations of the Shaheed Behesti Port at Chabahar. Last month, the US waived India from its fresh sanctions on Iran's oil imports and development of the crucial Chabahar port.
Indian pharmaceuticals
With less quality medicine coming from Switzerland, 60% of whose exports to Iran are made up of medicine and medical equipment, Iran has been looking at India to invest in producing pharmaceutical products.
Last December, former Iranian Health Minister, Mohsen Ghazizade Hashemi, tried to lure leading Indian pharmaceutical companies to produce necessary medicine to meet Iran’s demand. Several leading Iranian pharmeceutical companies will travel to India to seek further bilateral cooperation.