By Mehdi Garshasbi

India and Iran enjoy age-old friendly ties, says Indian envoy to Tehran 

January 25, 2018

TEHRAN- On the occasion of India’s National Day, Indian Ambassador to Iran told the Tehran Times in an e-mail interview that his country and Iran have had a long history of good relations in cultural as well as economic affairs. 

Referring to Chabahar port as one of the most important projects undertaken by his country in Iran, Ambassador Saurabh Kumar said India’s engagement in the port is “progressing well”.

“Presently, a large consignment of wheat (110,000 metric tons) is moving from India to Afghanistan via Chabahar port.”

The first phase of the Chabahar port on the Gulf of Oman was inaugurated on December 3 by Iranian President Hassan Rouhani. The port, a gateway to golden opportunities for trade, opened a new route of connection between Iran, India and Afghanistan for more trade and commerce among the three countries.

Following is the complete text of the interview.

Q: What are the main spheres of cooperation and trade between India and Iran?

A: India and Iran enjoy age-old friendly ties marked by people-to-people contacts and trade and commerce.  Our political relationship is good and Prime Minister Modi’s visit to Iran in May 2016 gave it a strong impetus. Transit and connectivity, infrastructure, oil and gas, petro-chemicals, steel and machinery, and agricultural sector are the main areas of our cooperation.

Q: How do you see the change in bilateral economic ties after implementation of the nuclear deal?

A: India-Iran economic and trade ties saw a significant growth following the implementation of the nuclear deal in January 2016. Last year (2016-17) our off-take of Iranian Crude was over 27 million metric tons, almost 100% increase over the year before (2015-16) when it was 13.6 million metric tons. Similarly, while in 2015-16 our bilateral trade was around 9 billion USD, in 2016-17 it reached almost 13 billion USD. So the positive effects of the nuclear deal on our bilateral economic and trade ties have been significant. An important development has been the opening of the office of Confederation of Indian Industries (CII) in Tehran. This would facilitate greater industry-to-industry interactions.

Q: What are the most important projects undertaken by India in Iran?

A: India and Iran are cooperating on a number of fronts. It was indeed a moment of great satisfaction when on 3 December 2017 President Rouhani inaugurated the Chabahar Port. India’s involvement in the port is progressing well. Presently, a large consignment of wheat (110,000 metric tons) is moving from India to Afghanistan via Chabahar port. We are also looking at railway connectivity of Chabahar with Zahedan which would further facilitate transportation of transit cargo from the port to Afghanistan. International North-South Transit Corridor (INSTC) is another area where India and Iran along with other partners are cooperating.  Significant progress was made with Iran developing Astra to Astra railway link, as well as, Qazvin – Rasht railway link.  India has now become a member of TIR Convention which would facilitate transit cargo from India to Russia/Europe and to Central Asia. On Farzad-B gas field, discussions have not been to the satisfaction of both countries, but we do hope that companies on both the sides would come up with solutions which are mutually beneficial and result in a win-win situation.

Q: What are India’s latest plans for the development of Chabahar Port?

A: The contract for phase-I of Shaheed Beheshti port at Chabahar was signed during Prime Minister Modi’s visit to Iran in May 2016. Under this, India would invest USD 85 million for equipping the port and provide financing of USD 150 million for other projects. The port would be operated for 10 years by India which has undertaken to provide up to USD 23 million per year. Overall, things are moving well. Equipment is in the process of being procured. We are, as I said, talking about hinterland railway connectivity for Chabahar port.

Q: In your opinion, what are the main obstacles which may hinder the two-way trade?

A: One of the main obstacles which we have encountered is insufficient banking channels for bilateral trade.  This is not an India-specific problem.  At the same time, if you compare the banking situation in January 2016 to now, there has been considerable progress.  We have the Rupee payment mechanism run by UCO Bank and we are now discussing the possibility of a Rupee-Rial mechanism between our two countries.  UCO Bank opened its representative office in Tehran last year and we are hopeful that branches/offices of Iranian banks in India will be open soon. Some Indian banks have established correspondence banking relations and are undertaking Iran-related transactions.  So while the situation is not completely satisfactory, it would be wrong to say that progress has not been achieved.

Q: Have any high-level political visits or economic and financial dialogues been scheduled between Iran and India for the year 2018?

A: We want 2018 to be a positive and productive year in India-Iran bilateral relations. Prime Minister Modi, during his visit to Iran in May 2016, had invited President Rouhani to India. We are looking forward to this visit.  Our Joint Commission Meeting is also due and it would be our effort to schedule this during the course of the year. Last December, Foreign Minister Zarif was gracious to host our External Affairs Minister while she was transiting through Tehran. Earlier this month, Minister Akhoundi had wide ranging and productive discussions in India.  Later this month, our Deputy Minister for Commerce will be in Tehran for Joint Working Group on Trade. There are other meetings lined-up for the year. So you see our agenda is quite full and we do hope the year would consolidate our friendly ties even further.

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