The deal to lift international sanctions against Iran will allow India (and
many other countries) to reinvigorate its economic and strategic ties with
Tehran, reports the BBC.
Bilateral trade between the two countries is currently an estimated $14bn
with the balance of trade in heavily in Tehran’s favour. Indian exports to Iran
were around $4.2bn in 2014.
As reported by the BBC, India mainly imports oil from Iran, but has been
hampered by restrictions placed by global powers.
For instance, due to the sanctions, India pays for the oil in Indian rupees
and the money is deposited in an Indian account. There is currently some $6bn
in pending oil payments to Iran.
The lifting of the sanctions now means India will have to pay for the oil
in dollars.
As regards Indian exports (automobile parts, tools, motors and chemicals),
a drop is expected.
“Indian exporters will have to compete with Eastern European manufacturers
who produce low end products like spanners, hand tools and auto parts. Since
the value of the euro has depreciated in the last few years, we will be facing
stiff competition from European manufacturers,” said Ajai Sahai, the director
general of the Federation of Indian Export Organisations.
But it’s not all doom and gloom. India’s pharmaceutical and IT companies
are expected to gain in the long-term.
“Many of the big Indian pharmaceutical and textile businesses were
reluctant to deal with Iran because they were afraid of the sanctions. Now they
can deal with Iran freely and invest there. So it will be a big boost for
Indian exports,” said Sahai.
http://www.neurope.eu/article/how-india-will-be-affected-by-irans-nuclear-deal/