Modi's Tehran trip to boost Iran-India trade ties

Modi’s Tehran trip to boost Iran-India trade ties

Energy cooperation, connectivity and Indian companies’ return to hydrocarbon projects in Iran will

dominate the agenda of Prime Minister Narendra Modi’s 2-day visit to Tehran from May 22.

Modi will call on Grand Ayatollah Sayyid Ali Hosseini Khamenei, Supreme Leader of Iran. He will also

meet Hassan Rouhani, President of the Islamic Republic. Modi’s visit will be the first by an Indian prime

minister after the United Nations, United States and European Union started easing sanctions on Iran in

July 2015 following its nuclear deal with E3+3 (US, Russia, China, UK, France and Germany).

Officials in New Delhi told DH that Modi’s visit to Tehran might see progress on New Delhi’s proposal for

allowing ONGC Videsh Limited (OVL) to develop the Farzad B gas field in Iran. The OVL, along with Oil

India Limited and Indian Oil Corporation Limited, had earlier invested about $ 100 million in Farzad-B gas

field, but production could not be started as Indian companies found it difficult to stay engaged in

hydrocarbon sector due to sanctions imposed by US and European Union. New Delhi, however, last year

conveyed to Tehran Indian PSUs’ interest to return to the project after sanctions were eased last year.

Tehran was initially not keen to give it back to the OVL without a bidding process, but New Delhi claimed

to have made some progress in its discussions with Tehran.

Modi and Rouhani earlier met at Ufa in Russia on July 9 last year on the sideline of a Shanghai

Cooperation Organisation meeting.

A few weeks back, Modi’s government approved proposal of the Ministry of Shipping for provision and

operationalisation of credit of $ 150 million from the EXIM Bank for development of Chabahar Port in

south-eastern coast of Iran. India will equip and operate two berths in Chabahar Port Phase-I with

capital investment of $85.21 million and annual revenue expenditure of $22.95 million on a 10-year

lease.

The Chabahar Port will give India a sea-land access to Afghanistan and Central Asia, bypassing Pakistan.

India, Afghanistan and Iran had finalised a trilateral transport and transit deal, which would allow Indian

exporters utilise the Chabahar Port and besides giving access to markets in Afghanistan through

Zahedan in the West Asian country.