An Indian analyst of the world affairs believes that the ties between Iran and India will enter into a new era once the Western sanctions on Iran are lifted.
In an exclusive interview with IRNA here, an associate fellow in the Pahle India Foundation, a New Delhi-based think tank, Rajan Kalsotra said, “India’s relationship with Iran has been marked by geniality except for few instances, like in 2005 and 2006, when India voted against Iran in the International Atomic Energy Agency. At present, both India and Iran enjoy amicable and harmonious relations and they, after lifting of the Western sanctions on Iran following the Iranian nuclear deal, will enter into a new era of much more comprehensive cooperation.”
“Earlier, because of economic sanctions on Iran, India had not been able to carry out regular business with the Islamic Republic. Under the US pressure, India had to bear losses even to implement sanctions against Iran.” The seasoned expert of the international affairs said, adding that “In short, the nuclear deal has opened more passages for India to do business with Iran and vice-versa.”
Elaborating the volume of the trade between Iran and India, Kalsotra said,”The bilateral trade between India and Iran in 2014-15 stood at $13.13 billion, with a trade balance of $4.78 billion in favor of Iran. The majority of Indian exports to Iran included cereals, mostly rice ($1.24 billion), and iron and steel products ($0.78 billion). As of now, Iran is India’s top importer of basmati rice.”
On the impact of the Iranian nuclear deal on India, he said, “Most of the Western countries have lined up to fiercely invest in Iran. Also, after the removal of economic sanctions on Iran, Indian exports, especially auto components, will face stiff competition from other exporting countries to Iran. In 2014-15, India exported nearly $102 million worth of auto components to Iran. But the loss will be compensated by additional exports of farm products.”
Emphasizing on the need for a signing a Free Trade Agreement between Iran and India, Kalsotra said, “Now, India should move forward in negotiating a Free Trade Agreement (FTA) with Iran. The FTA will be beneficial for both the countries. With the FTA in place, Indian exports will face less competition from other exporting countries to Iran, and through Iran, Indian products can also get market access to Europe and Africa.”
“India, as of now, faces a trade deficit of around $8.9 billion with Iran, which can be reduced through FTA by an increase in exports of existing products, and other products such as textiles, apparels, engineering products etc.” he added.
Referring to the meeting of the Iranian president Hassan Rouhani with the Indian Prime Minister Narendra Modi at Ufa, he said, “In a meeting with Prime Minister Narendra Modi in Ufa, Russia, during the Shanghai Cooperation Organization Summit, Iranian President Hassan Rouhani proposed India to play a bigger role in Iran and invited investments to the tune of eight billion dollars from India to carry out strategic infrastructure projects such as building of ports, railways and roads.”
Terming the development of the Chabhar port as an important project for India, Kalsotra said, “In 2003, India and Iran signed an agreement to develop the Chabahar port under the first NDA Government. But due to the imposition of the economic sanctions on Iran, India had not exhibited much interest in pursuing it. It was only in May this year that India signed another Memorandum of Understanding with Iran to develop the port with an investment of $85 million. With this investment, India will construct a container terminal and a multi-purpose cargo terminal in Chabahar port.”
“The Chabahar port is exceedingly important for both India and Iran. To India, Chabahar port will give access to the large reserves of oil and gas in the Central Asian region by circumventing Pakistan. The Chabahar port will also help India to have easy access to Afghanistan.”