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India to continue business with Iran despite US sanctions

In an exclusive interview with the Islamic Republic News Agency (IRNA), PS Chandhok who is the vice chairman of India-Iran Chamber of Commerce said that his country will not join the US sanctions against Iran unless there is a sanction endorsed by the United Nations.

Commenting on the possible reaction of India to the US pulling out of the Iranian nuclear deal and re-imposing its economic sanctions on Tehran, he said: “It is premature at this stage to draw any conclusion as it appears that India is watching the situation and the projects of its interests will be determined on the basis of New Delhi’s national priorities. Unless there is a sanction endorsed by the United Nations, it appears that India will continue doing business in its sovereign interests and respects the same for Islamic Republic of Iran.”

On the possible impact of the US sanctions on Iran on India’s projects in Chabahar, the businessman stressed that the “Post-imposition of the US sanctions, the neighbouring countries of Iran have launched many schemes to attract foreign investments. Therefore, there is a need to focus beyond Chahbahar for India-Iran partnership, mainly by the Indian private sector and, as long as there is no UN sanctions on Iran, New Delhi will continue to boost the Chahbahar. However, this question needs to be addressed by the Iranian side, especially at this juncture, to allow the dwindling demographics of the small Indian community living in Iran to expand their business without need for work visa. Iran could consider to open 90-day Visas on Arrival for all the Indian nationals and issue Ten-Year Investor Visa for the Indian nationals to attract them, similar to the one launched by the UAE.”

“Facilitation of investment and business in Iran needs to be boosted to attract Indian investments and based on the agreements exchanged during the visit of His Excellency President Mr Rouhani to India, it would be beneficial for both countries,” PS Chandhok added.

Asked to offer his view on the possible effect of an increase in the oil prices on Indian economy after the US re-imposes sanctions on Iran, he said: “India's strategic energy needs and the escalation of prices in the world after the re-imposition of the US sanctions on Iran is not in India’s interest. Already, people in India are upset over the rise in the petrol and diesel prices, especially at the time when India is heading for general elections in 2019, and has its consequential effects. India knows that Iran has always been supportive on the oil prices, supplies and payment mechanisms and rather it appears that the government of India would like to further engage and negotiate with Iran to keep the fuel prices low in India as it may affect the results of elections turns out in 2019.”

As for the possible mechanisms for Iran and India to conduct business despite the US sanctions on Iran, he said: “Prima facie, since India and Iran have already Indian Rupee (INR) mechanism which has worked well during the previous sanctions era, now it depends on the Iranian side to consider which options it desires from India for payments against oil exports to safeguard its financial security on the funds and perhaps both Iranian Rial and INR mechanism could be in place and there is need to opt for development and establishing new mechanism of bilateral SWIFT type of payments which is exclusive between the Central Banks of the two counties or nominated banks beyond the existing SWIFT mechanism.”

“India and Iran business will hopefully survive the entire current crisis due to traditional nature of business and needs to be further strengthened between the two countries to opt for preferential tariff pact immediately to increase the trade and investment,” he concluded.

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