NEW DELHI: In 2011-12, the first full fiscal in which Iran faced sanctions and restrictions on dollar-denominated trade, India's exports to the Gulf nation was estimated at $2.4 billion. In three years, it more than doubled to almost $5 billion following government's special efforts to tap into the market, which resulted in cereal exports alone nearing the $2 billion mark.
While basmati exports are estimated at over $1 billion, shipments of iron and steel, chemicals, machinery, vehicles and tea too soared against the backdrop of sanctions.
By the end of the last fiscal, as the West started negotiations to remove the sanctions, exports had begun to come off the peaks seen just a year ago. With the sanctions gone, exporters now see the market shrinking in the coming months as other sources open for trade especially as the government's efforts to push auto components and pharmaceuticals into Iran during the sanctions days did not get the private sector moving.
"Iran is an attractive market where we had little competition. But now we will face intense competition. Iran will have more options both in terms of exports and imports. Now the West will have a tremendous opportunity," said Biswajit Dhar, professor at Jawaharlal Nehru University.
With oil imports too expected to pick up, the trade deficit with Iran which had narrowed too may widen in the coming months. Due to the sanctions, as well as the fall in international crude prices, India's oil imports declined from $11.8 billion in 2011-12 to $7.2 billion last year.
Apart from trade, there are other concerns too. For instance, under the payment settlement mechanism devised to beat the sanctions, oil companies owe around $6.5 billion. While the government had expected some of this amount would be used for investment in India, with the sanctions expected to go, the flow is unlikely to materialize. To add to it, a bullet repayment would put pressure on the rupee and impact overall imports.
Padmanaban Unknown 1 day ago
Iran is not like other Middle East countries. the country is advanced in Technology comparing to other Middle East countries. Talking about all these western countries is they made all these dramas to improve their exports to Iran.
Born In January Padmanaban HellCalledEarth 1 day ago
and also, Iran will still buy from the countries which are low cost and quality products. So either Indian companies should become more competitive or die out... Nestle like products, will be a shame for all of us...
Sobber Sabre INDIA 10 hours ago
So what..?? India should change as the time and tide changes. Just ruing will not take to places..
rajan loknathan Trivandrum 1 day ago
Possible that Iran could become more assertive with its economy opening up and more suppliers at its doors.
R.S.Prasanna Venkatesha Begaluru 1 day ago
Now the fortune is in favour of Iran in many way. Iran will regain its economic strenth. Its bargaining power has increased. Indian exporters may experience some tough time.