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India-Iran Trade Ties: Tehran Changes Stance |
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At a time when Prime Minister Narendra Modi is wooing foreign investors to boost the Indian economy, Iran is gearing up for harder bargain in trade talks with the South Asian country.
With a nuclear deal with the five world powers and Germany in sight, Tehran has indicated that Indian companies will have to compete with other countries to get involved in infrastructure projects in the West Asian nation. During their recent talks, Iranian trade negotiators have informed their Indian counterparts that many other countries, such as Turkey, are ready to implement various development projects in Iran at a cheaper rate and India will have to compete with them. It means that the Indian companies may lose business in Iran, if they face tough competition.
For India, it is certainly a shocking development because New Delhi, ignoring the Western economic sanctions on Iran in response to Tehran’s continued ‘illicit’ nuclear activities, has always maintained ‘friendly’ ties with Tehran. India was one of few countries that were eager to do business with Iran, despite economic sanctions. In October 2014, the Iranian government had signed a USD 233 million contract with India’s State Trading Corporation (STC) on the basis of which STC was to facilitate exports of railways tracks – manufactured by Steel Authority of India Limited (SAIL) and Jindal Steel and Power Limited (JNSP) – to Iranian railways.
Indian Trade Secretary Rajeev Kher, who recently visited Tehran to hold trade talks with Iranian officials, has said that it is still not clear whether other countries are facing difficulties in doing business with Iran. He explained that there was a shift in Iran’s trade policy soon after it reached an agreement with six major powers in April and agreed to limit its nuclear activity in return for sanctions relief. As a final deal would be reached by June 30, India has decided to hold the next round of trade talks with Iran in July.
After coming back ‘empty handed’ from Tehran, Kher told the local media in New Delhi: “They are no longer the same Iranians that came to us last year for signing the deal. They were polite this time, but had an upper hand in the negotiations.” He said that India reduced the value of the deal by nearly 7% to USD 217 million, but Iran sought further cuts. The ‘Times of India’ daily reported that Iran might split the order with other countries. Even if India plans to supply 250,000 tonnes of railway tracks to Iran, STC will have to renew terms and conditions of the current deal, stressed Kher.
Meanwhile, the change in Iran’s stance is also evident in energy sector, with the National Iranian Oil Company informing Indian refiners that they would not enjoy discounts and free shipping while exporting crude oil to India anymore.
Source : inserbia.info
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