At a time when India is gradually reducing its dependence on Iranian oil, both countries are now trying to strengthen their relationship by offering greater market access to each other in other commodities. Tehran, in a bid to improve trade ties with New Delhi, is considering opening of the Chahbahar port for shipments from India. At present, the Iranian port of Bandar Abbas serves as the major shipping point for most imports.
In the next few weeks, officials from both the countries will engage in bilateral discussions on issues related to oil, the new port and wheat exports, sources said.
“This week, a delegation from Iran’s oil industry is expected to visit New Delhi and the Indian industry lead by the chambers will visit Tehran in the first week of October. We have to increase our exports to Iran and hence, the new port needs to be opened. The turnaround will be reduced by half to two days if the Chahbahar port-located in south-east Iran becomes operational,? said a commerce ministry official.
Post industry level talks, a high-level delegation of the external affairs ministries of the two nations will meet to chalk out further steps to deepen their relationship.
The official added that sectoral delegations from Iran have been meeting their Indian counterparts every fortnight post the harsh restrictions on Iran’s exports imposed by the US and European Union earlier this year.
Since the ban on Iranian oil imports came into effect on the starting July, Indians oil firms have been gradually reducing their dependency of importing oil from Iran and making alternative arrangements.
The country’s largest buyer of Iranian crude ? Mangalore Refinery and Petrochemicals ? has reduced its oil imports to 5 million tonnes this fiscal from 6.2 million tonnes in 2011-12. MRPL bought around 7.1 million tonnes of crude oil during the year 2010-11.
Essar Oil, the second-largest buyer of Iranian crude, has also reduced imports by 15% from 5 million tonnes and has already entered into contracts with South American national oil companies such as Columbia and Mexico to buy crude.
?We have been importing oil from Iran and will continue to do transactions with them. At present, the payment mechanism is also settled, with 45% of the payments made through UCO Bank in rupees and the remaining 55% with Halkbank paid in euros,? Bhaswar Mukherjee, director finance HPCL said.
Earlier, the Reserve Bank of India (RBI) terminated a long-standing mechanism of settling payments through Asian Clearing Union mechanism.
Besides, New Delhi is also likely to push for wheat exports to Iran, which is facing strict sanctions from the West over its nuclear programme.
India, at present, exports agricultural commodities, pharmaceutical and medical diagnostic products besides textiles and steel products to Iran and is now looking at wheat and soybean exports to the West Asian country. “We are pushing for wheat exports to Iran which were banned 16 years ago after the grain was found to be infested with a fungal disease. However, we have been able to convince them that wheat is not harmful for human consumption,? said another commerce ministry official.
Larger playing field for India
* The Chabahar port provides India an alternative route to Afghanistan bypassing Pakistan. Tehran has moved rather slowly on this project despite India having built the Zaranj-Delaram road from the Afghan side of the Iran-Afghanistan border
* At present, the Iranian port of Bandar Abbas serves as the major shipping point for most imports.
* Apart from seeking access to the port, Delhi is planning to push for wheat exports to Iran, which is facing strict sanctions from the West over its nuclear programme