Resetting ties, India and Iran today held extensive talks on stepping up engagement on a range of key areas, particularly to increase Indian investment in oil and gas sectors in the Persian Gulf nation which has opened several lucrative sectors after lifting of sanctions under a landmark nuclear deal.
In a meeting here today, External Affairs Minister Sushma Swaraj and her Iranian counterpart Mohammad Javad Zarif reviewed entire gamut of bilateral ties and the centerpiece of the deliberations was to give a new momentum to overall ties. The focus of the talks was to ramp up India’s investment in areas of energy, ports, connectivity in Iran where investors from world’s major economic powers are rushing in to get early footholds after end of economic sanctions.
The size of Iran’s economy is around USD 400 billion, the second largest in the Middle East after Saudi Arabia, and the country is being seen as one of the world’s hottest investment destination as it has opened various critical sectors including oil and gas for joint ventures and foreign capital.
Countries like Japan, China, the US and a number of European nations are scrambling to take advantage of opportunities in the oil-rich nation after the sanctions were lifted in January. India has been eying deeper energy ties with Iran and has already lined up USD 20 billion as investment in oil and gas as well as in petrochemical and fertiliser sectors there. India is also keen to increase oil imports from Iran from current 350,000 barrels a day.
Recently, Iran has ended free shipping of crude oil to India and has terminated a three-year-old system of getting paid for half of the oil dues in rupees and the issue is understood to have figured in talks. Iran is now insisting on being paid in Euros for the oil it sells to Indian refiners. It also wants refiners like Essar Oil and Mangalore Refinery and Petrochemicals Ltd (MPRL) to clear nearly USD 6.5 billion of past dues in Euros, according to officials.
It is understood that India was ready to repatriate oil repayment to Iran through mutually workable banking channels and as per understanding reached between the concerned authorities of the two countries. Iran is planning to raise its oil output and share in crude production to pre-sanctions levels and India has conveyed that it was keen on joint ventures in the oil sector with Iran.