Iran, one of the largest crude steel producer in MENA is currently facing US Sanctions, owing to which the export and import of steel has been adversely affected. Many trade ally of Iran has suspended their trade with Iran which affected the Iranian economy.
Against all odds, India has continued its trade with Iran. It is to be noted that India is one of the largest exporter of Ferro alloys to Iran. US sanctions on Iran had limited to nil effects on ferro alloys import from India. Despite US sanctions, Iran managed to import 23,395 MT ferro manganese from India during CY’18. During CY’17, Iran imported 27,409 MT ferro manganese from India.
On Parallel lines, Iran imported 25,678 MT ferro silico manganese from India in CY’18. Imports of ferro silico manganese increased marginally in current calendar year against 25,346 MT imported in CY’17.
India Aims to Increase Trade with Iran without Violating International Laws
In Nov’18, India got exemption from US to trade with Iran which enabled both the nations to do business with each other. Recently Indian Commerce and Industry Ministry expressed its interest to expand the bilateral trade to do business of mutual interest.
Mr. Suresh Prabhu, Indian Commerce and Industry Minister said, “India will not violate any international law and within the framework of international law, we would like to work with Iran in a manner that we can deal with Rupee trade wherein both countries can trade the items of mutual interest. Iran wants to buy something from India and we want to buy oil”.
Payment Mechanism for India and Iran Trade
According to Iranian Foreign Minister Mr. Javad Zarif, “India and Iran are looking for alternative payments mechanisms to continue doing business with each other without facing the consequences of US sanctions.”
It is to be noted that India’s UCO Bank and IDBI Bank have been identified to route the payment as the two banks are not exposed to the US financial system. Iran is India’s third-largest oil supplier behind Iraq and Saudi Arabia. On other hand India is one of the major Ferro alloys and Graphite electrode exporter and to Iran.
According to Mr. Nitin Gadkari Transport Minister of India, “The government of India has already given permission to Iran to open a bank branch in Mumbai. They are going to open a branch in Mumbai in three months. That will be used for transactions”.