India needs to move ahead with the Urea Project to be set up in Iran as well work out the logistics of container traffic movements from Chabahar port to other Iranian cities
The Iranian New year, Nav Roz falls on 21st March and there are signs that export of basmati rice, which had stopped a couple of months ago, will start once again. It may be noted that, in 2013-14, India exported 1.4 million tonnes of basmati but this is likely to be about 800,000 tonnes by March this year, though the exporters were hoping to at least reach a million tonnes. This has not been possible due to excess stocks imported earlier.
Due to the US and European Union sanctions, Iran's export of oil has been restricted to 1.1 million barrels a day and India has been able to absorb as much as 42% of Iranian supplies last year. It may be remembered that the Special Rupee payment mechanism set up and operated through UCO Bank in Kolkata has been used for payment for imports from India, and part payment for oil imports has been paid into this account. This arrangement has helped both the countries.
Only a few weeks ago, due to the efforts taken by both the Governments, particularly the Indian Fertiliser industry, India has signed a memorandum of understanding (MoU) by which a 1.3 million tonnes (mt), a joint venture, to produce Urea using the gas as feeder stock. This 1.3 mt urea plant will be established in Chabahar port development area and the Indian companies that would take part are the Rashtriya Chemicals and Fertilisers, GNFC and GSFC.
Additionally, the memorandum includes the development of a container piers though a $100 million investment and permits the formation of joint ventures between Indian and Iranian companies, in various approved areas. With this MoU, India will gain maritime and land access to Afghanistan and Central Asian countries.
In fact, it is reported, in the Pakistani press, that India recently shipped two container consignments to Astara in Gilan province in Iran, on land route, and it was found to be both "economical" and "fruitful" for Indian investors.
By taking advantage of this MoU, India has plans to make further investments in Iran, especially, under what is to be called as "reverse' Special Economic Zones (SEZs). Indian officials claim that these reverse SEZs can produce various types of goods that can be exported to other world markets, and that India intends to establish such zones in friendly countries that have lots of raw materials that can be “finished” for export, not only to India but to other areas as well.
The Pakistani press has pointed out that Gwader Port is still not operating vigorously as Chabahar because supporting "structures" are not yet ready! It says that several projects, such as the 950 Kms railway line or the 900 Kms motor way to link with the railways/ highways of the country with the Gwadar port have so far remained only on "file"; whereas, the developments in Chabahar has been better. Thus they expect that with the Indian involvement, Gwadar port may face stiff competition from Chabahar!
In the meanwhile, while speaking at an event in Moradabad, Mehdi Mahdavipour, a representative of Supreme Iranian leader Ayatollah Khamenei, is reported to have said that Tehran is very much interested in "developing" ties with New Delhi. He said further that the Hassan Rouhani administration would try its best to bring back the Iran-Pakistan-India (IPI) pipeline project back on track in the near future!
It may be remembered that the project has been stalled due to security concerns over the pipeline traversing through Pakistan and the sanctions imposed on Iran by US/ European Union over its nuclear programme.
But of immediate importance are the urgent steps that Ananth Kumar, the Fertiliser Minister, has to take. These steps include moving forward with the Urea Project plan that has to be set up in Chabahar. A high powered business-oriented delegation must visit Iran to work out the logistics of container traffic movements from Chabahar port to other Iranian cities as well as for studying the prospects of connections to Central Asian republics. This they must do, just after the holidays, celebrating the Nav Roz!
has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)