India, Iran to Explore New Areas of Cooperation - Knowledge Economy, Trade, Connectivity

December 12, 2012

New Delhi: Terming Iran as an important country in the neighbourhood, Mr Yash Sinha, Additional Secretary (Pakistan, Afghanistan, Iran), Ministry of External Affairs, in a key speech, said in the context of western sanctions there is scope for increasing Indian exports to Iran if payment and shipping related difficulties are overcome.

Mr Sinha was speaking at the bilateral dialogue on ‘Developments in West Asia: Indian and Iranian Perspectives’ organised at the Institute for Defence Studies and Analyses on December 12, 2012. The dialogue is a continuation of the long-standing track-II bilateral cooperation arrangement between the IDSA and the Institute for Political and International Studies (IPIS), Tehran.

Mr Sinha referred to Iran being an important source of India’s crude imports and a provider of trade routes to Central Asia, Russia and Afghanistan. Iran continues to be a major supplier of petroleum products to India, said Mr Sinha, adding that the reduction of oil imports from Iran was primarily due to market factors and payment-related issues.

He mentioned that bilateral trade between India and Iran registered an increase of 18.76 per cent during the financial year April 2011-March 2012. Though import of petroleum and related products form a large part of this trade, he hoped that Indian exports to Iran could be diversified into other areas, such as export of Indian wheat, pharma and other products.

Referring to the successful visit of Prime Minister Manmohan Singh to Tehran in August (for the NAM Summit), he further mentioned regular high-level visits and interaction between the two countries at the political, official and business levels, as well as regular bilateral talks on economic and trade issues under the India-Iran Joint Commission Meeting.

On the Iran-Pakistan-India gas pipeline, Mr Sinha said that it remains an important project for India; however, there are pricing and transit security issues that still need to be resolved. He complimented Iran for successfully completing Phase I of Chahbahar Port and added that Indian firms would look into the phases II and III as an important opportunity for trade and investment.

He reiterated India’s support of the Kofi Annan Six-point Peace Plan as a way forward in Syria. India also supports the creation of a United State of Palestine within the framework of a two-state solution based on the United Nations Security Council resolutions.

From the Iranian side, Dr Mustafa Dolatyar, Director General, IPIS, highlighted the issue of rapid developments in the West Asian region and said that these developments affect Iran one way or the other. He also called the developments of the Arab Spring as an ‘Islamic Awakening’, akin to the Iranian Revolution. Dr Dolatyar added that this was an opportunity for these nations to get rid of dictators, corruption, more importantly, dependence on western powers ask for more transparency. He also added that this awakening is forward-looking and cannot be undone.

On bilateral issues, Dr Dolatyar said that no country in the modern world can deal with all its challenges alone, and needs a strategic and reliable partner. Iran sees India as such a partner. On Afghanistan, he emphasized that the situation was a ‘mess’ created by external powers.

Dr Dolatyar mentioned that Iran had been living with sanctions for over three decades and that Iranian society managed itself despite these sanctions. On current sanctions, he acknowledged that the banking system had been badly affected.

During the deliberations, both, Iranian as well as the Indian participants said that they have common concerns and interests in Afghanistan. There are opportunities for both the countries to work together as they did in the past. It was articulated by both the sides that despite limitations and problems in India-Iran relations, both can move forward, enhancing cooperation in new areas like knowledge economy, trade and connectivity issues. Suggestion was made for setting up of an eminent persons group on India Iran relations.

Earlier, in his opening remarks, Dr Arvind Gupta, Director General, IDSA, termed Iran as an important regional player and acknowledged the growing importance and recognition of this dialogue between the two countries. He also highlighted the fact that this dialogue was taking place in the wake of Indian Prime Minister Manmohan Singh’s successful visit to Tehran for the Sixteenth NAM Summit. This dialogue also gained significance in the backdrop of the evolving situation in the Gulf and West Asia as well as worsening Israel-Palestinian relations during the recent Gaza crisis.