India is committed to develop relations with Iran, President of the Federation of Indian Export Organizations (FIEO) M. Rafeeque Ahmed said here Monday.
He made the remark at the joint economic session between a visiting economic delegation of India and the economic activists of Iran’s East Azarbaijan Province in Tabriz.
“Iran and India have good potentials for cooperation in various fields including the trade of textile and agricultural products,” the official added.
India’s Ambassador to Tehran Serio Stava also said in this meeting that monetary transactions between Iran and India would be made easier following achieved agreements between Iranian bank of Persian and India’s UCO Bank.
Pointing out that the governments have facilitating roles in countries’ economic relations, he said that the businessmen of both counties are now eager for having broader economic cooperation.
The Indian economic delegation visiting Iran before arriving in Tabriz had a meeting with the Iranian businessmen at Tehran Chamber of Commerce and is going to head for Isfahan from Tabriz.
The two countries’ banks agreement for receiving 45% of the Iranian oil sales to India in rupees was achieved during the Indian economic delegation’s meeting with Iranian businessmen at Tehran Chamber of Commerce.
Iran's trade with India crossed US$13 billion in 2007, an 80% increase in trade volume within a year. Via third party countries like UAE this figure touches $30 billion.
Oil and gas: In 2008-09, Iranian oil accounted for nearly 16.5% of India's crude oil imports. Indian oil imports from Iran increased by 9.5% in 2008-09 due to which Iran emerged as India's second largest oil supplier. About 40% of the refined oil consumed by Iran is imported from India.
In June 2009, Indian oil companies announced their plan to invest US$5 billion in developing an Iranian gas field in the always Persian Gulf.
In September 2009, the Mehr news agency reported a Pakistani diplomat as saying, 'India definitely quitted the IPI (India-Pakistan-Iran) gas pipeline deal, in favor of Indo-US civilian nuclear agreement for energy security. Iranian officials however said that India is yet to make an official declaration.
In 2010, the US officials warned New Delhi that Indian companies using the Asian Clearing Union for financial transactions with Iran run the risk of violating a recent US law that bans international firms from doing business with Iranian banks and Tehran's oil and gas sector, and that Indian companies dealing with Iran in this manner may be barred from the U.S.
The United States criticizes the ACU of being insufficiently transparent in its financial dealings with Iran and suspects that much of their assets are funneled to blacklisted repressive organizations in Iran such as the Islamic Republic Guard Corps (IRGC) revolutionary guards. The United Department of the Treasury also believes that Iran uses the ACU to bypass the US banking system. On 27 November 2010, the Indian government, through the Reserve Bank of India, instructed the country's lenders to stop processing current-account transactions with Iran using the Asian Clearing Union, and that further deals should be settled without ACU involvement. The RBI also declared that they will not facilitate payments for Iranian crude imports as global pressure on Tehran that grows over its nuclear program.
This move by the Indian government will make clear to Indian companies that working through the ACU 'doesn't necessarily mean an Iranian counterpart has an international seal of approval'. As of December 2010, neither Iran nor the ACU have responded to this development.
India objected to further American sanctions on Iran in 2010. An Indian foreign policy strategist, Rajiv Sikri, dismissed the idea that a nuclear armed Iran was a threat to India, and said that India would continue to invest in Iran and do business.