|
Bilateral trade between India and Iran is picking up pace from US$11.17 billion in 2007-08 to US$14.55 billion in 2008-09. The economy of Iran largely depends on the oil and gas sector. Nevertheless, the country’s economy for sometime now has been withering the onslaught of combination of factors such as startling changes in the oil market, long-drawn-out war with Iraq, mounting inflation, worldwide isolation and rising foreign debt.
Now the country in an attempt to reconstruct the economy is striving hard to bring some semblance in the economy. Additionally, the government also wants to switch the economy from centrally-planned to free market economy. Such changes have been drawing Indian SMEs to further enhance their ties with Iran.
Trade relations between India and Iran
The principal export items from India to Iran are pharmaceuticals, fine chemicals, iron and steel, rice, tea, man-made yarn and fabrics, processed minerals, machinery and instruments, agricultural chemicals and rubber products.
Iran exports petroleum, petrochemical products, fruits and nuts and carpets to India.
Potential sectors
Iran offers significant trade opportunites for Indian SMEs present in sectors such as freight transport, food processing, pharmaceuticals, healthcare and IT. The other potential sectors include: infrastructure, petrochemicals, automobile manufacturing and telecom. Moreover, Indian smes are also entering into JVs with Iranian counterparts in areas such as textiles, steel and mining.
Proposals
To boost trade between the two countries, the Indian and the Iranian governments have formed a Joint Council (JBC). Both the nations have also entered into different joint ventures. That apart both the nations are also planning to jointly launch various projects in the oil, gas and railway sectors. Furthermore, the governments of both the nations are on the verge of closing two agreements, which are as follows: Double Taxation Avoidance Agreement (DTAA) and Bilateral Investment Promotion & Protection Agreement (BIPPA)
|
