The Telegraph
Tuesday , May 8 , 2012
Since 1st March, 1999
CIMA Gallary

Bid to strengthen Iran trade ties

New Delhi, May 7: India is looking to export items to Iran that remain outside the scope of UN sanctions, such as farm products, though in their trade talks today, Tehran pressed for more oil sales even as visiting US secretary of state Hillary Clinton demanded lower reliance on Iranian oil.

A 56-member Iranian trade delegation, led by Yahya Ale-Eshagh, the president of the Tehran Chamber of Commerce, Industry and Mines, met Union commerce secretary Rahul Khullar today.

Sources said the two sides discussed ways to narrow the trade gap and increase export of items “where there are no sanctions” as the payment mechanism has been resolved.

Agricultural products, pharmaceutical and medical equipment are outside the purview of international sanctions on Iran, under attack for its disputed nuclear programme.

India, which predominantly exports basmati rice, tea, sugar and soyabean, plans to increase the volumes and tap markets in pharmaceuticals, medical equipment and engineering goods.

Yahya Ale-Eshagh also pitched for more crude exports even though oil firms such as Mangalore Refinery and Petrochemicals Ltd (MRPL) and Essar Oil have cut imports.

“You (India) need oil and we need to sell and we need good co-operation... We will solve all difficulties. I think everything will be solved,” he said.

Clinton, who is here on the last leg of her three-nation Asia trip, pressed India to do “even more” to cut its oil imports from Iran.

She said, “We hope they will do even more and we think there is an adequate supply in the market place such as Saudi Arabia and Iraq. We think this is part of India’s role in the international community.”

India imports 80 per cent of its crude requirement, and Iran is the second-largest supplier after Saudi Arabia. New Delhi said it needed to continue buying Iranian oil to meet its domestic requirement.

Though India has not officially announced plans to cut back on oil imports from Iran as yet, the country’s top oil importers have been asked to reduce purchases by 20 per cent.

According to government data, imports from Tehran fell to 18.5 million tonnes (mt) in 2011-12 from 21.2mt in the previous fiscal.

This year, it may come down to 14mt. MRPL is planning to reduce purchases to less than 100,000 barrels per day (bpd) from 142,000bpd; Essar Oil is mulling a 15 per cent cut to 85,000bpd from 100,000bpd.

Huge oil imports have tilted the balance of trade in favour of Tehran and New Delhi has been exploring ways to increase export of farm products.

“There is a huge demand for Indian agri products and pharmaceuticals in Iran. We need to focus on that market. It would also help in bridging India’s ballooning trade deficit,” Rafeeq Ahmed, president of the Federation of Indian Export Organisations, said .