Wednesday April 1, 2020
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India set to expand trade relations with Iran

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New Delhi: A press report in Iran revealed that New Delhi was interested in inking a preferential trade agreement with Tehran once the global embargo related to trade was lifted.

“We have a good relationship with Iran. It is a good market for us in the long term,” the Economic Times newspaper quoted a “senior” commerce department official as saying.

If the agreement is sealed then it would be the first of its kind in India. Though the trade pact is in a conceptual stage, both India and Islamic Republic of Iran had expressed deep eagerness in the deal. However, no formal negotiations had been initiated.

New Delhi’s eagerness comes at a time when the Obama administration is slated to lift the embargo in January next year. Notably, the report filed by the nuclear watchdog of the United Nation said that there was a dearth of evidence that could prove that Iran was carrying out the process of uranium enrichment for developing nuclear arms. They had successfully justified its activities of the hard-water plants as well.

Earlier, the Manmohan Singh government in India had failed to implement the project of a gas pipeline which also involved Pakistan. It had allegedly irked the Tehran.

However, the Iran and the six-nations talks on the nuclear deals and the IAEA’s reports had cornered Tehran.

India had not explored the West Asian market before due to obvious reasons. Civil wars, militancy and religious fundamentalism in the west Asian counties did hinder business strategies.

However, currently India is spreading its market globally under the stewardship of Narendra Modi. The deal with the country would definitely provide a foothold to explore markets in the region.

Besides exporting chemicals, agricultural goods and automobile spares to Iran, India ranks second in importing crude oil from them.

A deal with them would not only be profitable for India, but it would bolster the economy of the country.

(With inputs from ET)

Next Story

Coronavirus in Iran Leads to Economic Decline

Iranian Economy Faces Setback on Coronavirus Concerns

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Iran coronavirus
Spread of the coronavirus in Iran has pushed that country's currency to lows not seen in almost a year. Pixabay

By Edward Yeranian

Arab media are reporting that the spread of the coronavirus in Iran has pushed that country’s currency to lows not seen in almost a year. Iranian health officials say there are more than 200 confirmed cases in the country, and at least 26 deaths.

Turkey, Armenia, Oman, Bahrain, Kuwait and the United Arab Emirates have all closed land and air borders with Iran in recent days, due to the coronavirus.

As the closures stop the flow of traffic to and from Iran, fears of a deepening economic slump are hitting Iran’s national currency, the riyal.

Arab media say the riyal fell to 158,500 to the dollar on the black market Wednesday, its lowest level in over a year. The riyal’s official peg is 42,000 to the dollar.

Iran coronavirus
As the closures stop the flow of traffic to and from Iran, fears of a deepening economic slump are hitting Iran’s national currency, the riyal. Pixabay

Many economists fear that both Iran’s oil and non-oil exports will be hit by a regional trade slump due to the virus. Religious tourism to Iran’s holy sites will also be affected by border closures and quarantines around public places. Sales during the normally robust pre-Nowrouz new year’s festival are falling.

Despite the downward pressure on Iran’s economy, President Hassan Rouhani told journalists Thursday that the country, until recently, had been thriving.

He said that both industry and agriculture did very well during the past several months. He added that the economy will flourish if Iranians do not let U.S. sanctions or the coronavirus have a psychological impact on their behavior.

Iran coronavirus
Women wear masks to protect themselves against the coronavirus, as they cross a street in Tehran, Iran. VOA

Despite the president’s optimism, state TV showed Iranians in the capital, Tehran, swarming a pharmacy in the pursuit of flu medication and face masks. Panic-buying was also reported at some other businesses.

Former Iranian President Abolhassan Bani Sadr told VOA that “almost everything necessary to fight the virus outbreak is missing in Iran,” and ordinary people “blame their government and U.S. sanctions for the current crisis.”

He added that the Iranian economy depends on trade with its neighbors, so one can just imagine the poverty Iranians face if trade diminishes with partners like Turkey, Iraq, Russia and elsewhere.

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An Iranian member of parliament recently blamed Tehran’s eagerness to come to the rescue of its major trading partner, China, for shortages inside his own country. Iran sent thousands of face masks to China during the initial phase of the coronavirus outbreak, and now faces a severe shortage at home.

“Iranians,” laments former President Bani Sadr, “now have no confidence in the regime or its propaganda, and even less faith that the outside world will come to their rescue.” (VOA)