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Iran determined to meet India’s import needs: Iranian ambassador
The official claims that if both nations initiate a rupee–rial trade mechanism, bilateral trade between Iran and India has the potential to increase up to $30 billion
By News Desk - March 18 2022
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(Photo credit: Econfinity.com)

On 18 March, Iran’s ambassador to India, Dr Ali Chegeni, said that the Islamic Republic is ready to meet India’s energy requirements.

Before the withdrawal of the US from the Joint Comprehensive Plan of Action (JCPOA) in 2018, along with the re-imposition of sanctions, Iran was India’s second largest oil supplier.

The Indian trade facilitation body MVIRDC World Trade Center quoted Chegeni as saying: “The rupee–rial trade mechanism can help companies from both countries to deal with each other directly and avoid third party intermediation costs.”

The two nations formerly devised a barter-like system to liquidate trade settlements, where Indian refiners acquired Iranian oil in rupees that were sent to local banks. The funds were then utilized by Tehran to pay for Indian imports.

India is the world’s third biggest oil consumer and importer, primarily covering its crude oil needs via imports alone.

With the US re-imposition of sanctions against Iran in 2018, the trade dynamic between Tehran and New Delhi exponentially declined, decreasing the value of their exchanges from $17 billion to $2 billion by March 2019.

Chegeni claims that if both nations initiate a rupee–rial trade mechanism, bilateral trade between Iran and India will have the potential to increase up to $30 billion.

The Iranian diplomat also highlighted that Iran retains a variety of complimentary exports as Iran is a prominent producer of petrochemicals, urea, and organic foods, commodities that are typically imported by India.

Chegeni went on to say that Tehran is also willing to comply with India’s need to discover alternative routes for pipeline projects as well as stalled land for transporting gas to India.

Nonetheless, India has said it is still undecided about such projects due to “security reasons.”

With the potential strengthening of the trade relationship of the two nations, the consolidation of this economic dynamic is still dependent on the outcome of the Vienna talks and the lifting of US sanctions.

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