Further escalation in US-Iran tension may affect India’s exports: Industry body
NEW DELHI: Further escalation in the tension between the US and Iran will have implications on India’s exports to the Persian Gulf nation, apex exporters body FIEO said on Sunday.
Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said so far exporters have not flagged any concerns related with exports to Iran.
“However, if the tensions will continue, it may have affect on India’s exports to Iran,” he said.
He added that due to existing trade sanctions on Iran, Iranian shipping lines are only taking Indian consignments to that country.
Tensions between Iran and the US increased after an American drone strike killed top Iranian general Qasem Soleimani last week.
Iran is a key trading partner of India.
Its major exports to India are oil, fertilisers and chemicals, while it imports cereals, tea, coffee, basmati rice, spices and organic chemicals, among others.
India’s exports to the Persian Gulf nation in 2018-19 were worth USD 3.51 billion (about Rs 24,920 crore), while imports were valued at USD 13.52 billion (about Rs 96,000 crore).
The trade imbalance is mainly because of India’s import of oil from Iran.
Both the countries are holding negotiations for a bilateral preferential trade agreement (PTA) to increase trade.
Unlike a free trade pact, where two trading partners significantly reduce or eliminate duties on maximum number of goods traded between them, PTA involves removal of duties on certain identified products.
FIEO had earlier said that Iran holds huge export opportunities in sectors such as agriculture, chemicals, machinery, pharmaceuticals, paper and paper products, man-made fibre and filament yarn and essential oils.