BHEL, SAIL in talks with Iranian companies
New Delhi, Dec. 18:
India is looking at large-scale project exports to Iran for bridging the existing trade gap and fuller utilisation of rupee payment made to the country for oil purchases.
"Project exporters from India including BHEL, SAIL, IRCON and RITES are already in talks with Iranian companies on possible opportunities," a Commerce Ministry official told Business Line.
The Inter-Ministerial Group on facilitating trade with Iran headed by Commerce Secretary S.R. Rao met on Tuesday to discuss ways to boost exports to the country. It was attended by senior officials from the Department of Economic Affairs, RBI and public sector companies including BHEL, SAIL, IRCON and RITES.
China, too, is interested in investing in projects in Iran in lieu of oil payments it owes the country.
"We believe that if project exports from India take off, it could actually enable us to make the entire payment due to Iran for oil purchases in rupees," the official said.
At present, India pays for 45 per cent of oil purchases from Iran in rupees which is deposited in its rupee account in UCO Bank. This is utilised by Iran to make payments for purchases made from India.
The rupee payment mechanism was put in place after foreign banks refused to deal with Iran following the US and EU sanctions on the country for its alleged nuclear activities.
Since India's exports to Iran was just a fraction of its imports from the country when the sanctions were placed two years ago, it was decided to restrict rupee payment for oil to 45 per cent of the total oil bill.
India's exports this year is likely to cross $5.5 billion compared to less than $3 billion two years ago due to the concerted efforts made by both countries to increase goods inflow from India.
India's purchase of oil from Iran annually exceeds $10 billion despite the country tapping other oil supplying countries more aggressively following the sanctions.
amiti.sen@thehindu.co.in
(This article was published on December 18, 2013)
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