New Delhi: Ways to increase commercial links with sanctions-hit Iran to reduce huge bilateral trade imbalance will be high on the agenda when External Affairs Minister Salman Khurshid travels to Tehran on Friday on a three-day visit. India's participation in the upgradation of Iran's Chahbahar port, which gives access to Afghanistan, will also be among a host of issues expected to figure in the talks that Khurshid will have with his counterpart Ali Akbar Salehi and President Mahmoud Ahmedinejad.
The two sides will sign three MoUs following the Joint Commission meeting that is taking place after a gap of two and a half years. India is looking at ways to increase trade with Iran as it is concerned over the "grave" imbalance. The two-way trade is around 15 billion dollars, out of which Indian exports account only for around 2.5 billion dollars. Oil is the biggest item of Indian import from Iran but India feels there is a lot of scope for increasing Indian exports to the Persian country particularly in pharmaceuticals and food.
However, efforts to enhance trade have been facing hurdles because of sanctions imposed by the UN and European Union, which make payment difficult. There are also problems like re-insurance of oil refineries and transportation of consignment from Iran because of the sanctions. "We adhere closely to the UN sanctions but we are not bound by unilateral sanctions.... But these sanctions have had an impact on legitimate trade," a source said in Delhi on Friday, adding the two sides have been discussing a way out of this situation.
Chahbahar port is strategically crucial as it gives access route to Afghanistan and India is actively involved in its upgradation with plans to infuse around 100 million dollars. Chahbahar port, which is surrounded by a free trade zone, is crucial particularly since Pakistan does not allow transit facility from India to Afghanistan. Along with Chahbahar project, Khurshid and his Iranian counterpart will also discuss the issue of Afghanistan, keeping in mind the exit of US-led international forces in 2014. "Chahbahar will be a symbol of cooperation among the three countries," a source said.
While both India and Iran have interest in the future of common neighbour Afghanistan, there is no proposal to form any trilateral grouping. With regard to the trade, India feels there is lot of scope for export of pharmaceuticals and food to Iran. Till now, Iran has been depending on the West for these products but now it is looking for other suppliers. India offers low cost drugs and food, which could suit the sanctions-hit country. About the problem of payments, the sources said it has been resolved partially. With regard to re-insurance, they said the EU sanctions do not prohibit re-insurance of refineries in third country.