India Iran Preferential Trade Agreement

Iran expects to conclude a preferential trade deal with India this year that will allow both countries to reduce tariffs on the other`s products and also barter in the face of sanctions imposed by the United States, Iran`s ambassador to India Ali Chegeni said on Wednesday. From what has been said above, it might seem that India has been taken, where the choice of one possible scenario will create a bad taste for another. However, India can be diplomatic with the US when it comes to continuing its trade relations with Iran. India and Iran were important trading partners. India may have fallen into a spider`s web by imposing sanctions on Iran by the US and putting pressure on other economies to cooperate. Sanctions should put their trade deficit under pressure. When it comes to importing oil from Iran, India has the advantage of paying partly in rupees and being partly charged for food and pharmaceutical exports. Second, the world price of crude has been rising by nearly 18$US a barrel over the past four months. This can boost our CAD and interior prices if they are not sufficiently amortized. Third, Iranian oil is relatively cheaper, but U.S. officials have ensured its sufficient supply from Saudi Arabia, the United Arab Emirates, and the United States to avoid bottlenecks, if any, after the sanctions. Although the agreement has not yet been concluded on schedule, the two sides decide to conclude it as soon as possible in order to continue to promote bilateral trade. The move is seen as a possible way to continue trading, despite the criling sanctions imposed on the Islamic Republic after the end of the nuclear deal with Iran in 2015.

At the meeting, Iran stressed the importance of strengthening mutual trade relations and the need to continue preferential trade negotiations between the two countries. He expressed Iran`s willingness to immediately make arrangements for the sixth round of preferential trade negotiations between Iran and India via videoconference. Although talks between Iran and India to sign a mutual preferential trade pact began more than a decade ago and five round tables have been held to date, the agreement has yet to be signed. The Trade Intensity Index (ITI) with Iran, which has risen from 3.4 to 4.13 over the past three years, is another reason for the preference given to PTAs. It signals to Iran that it is an important trading partner compared to China and Turkey, where the IIT has fallen. In January 2014, Iran reached an agreement with Turkey. In this context, Turkey granted Iran concessions on 140 agricultural products, while Iran responded on 125 industrial products. Reaching such an agreement would be mutually beneficial for India and Iran. . . .