Dipak Dash   

While the focus is on the 2+2 India-US dialogue, an Iranian delegation is quietly operating behind the scenes in Delhi to work out a payment mechanism for the strategically important Chabahar port, besides showing interest in buying railway and heavy engineering equipment from India.

Discussions are underway to rope in UCO Bank and Bank Pasargad for a payment mechanism that will help circumvent US-driven sanctions against Iran — a move which can help bring down prices of crude. Significantly, the Iranian bank recently received a go-ahead to open a branch in the country.

The Iranian team is led by transport minister Abbas Ahmed Akhoundi, who assured minister for transport and shipping Nitin Gadkari on Thursday that Chabahar port would be handed over to India soon. “The port project was conceived and built much before the sanctions,” Gadkari told TOI after the meeting.

One of the first tests facing Chabahar, which is seen as a gateway to Afghanistan, is the Iran government’s insistence on a $3.5 million performance guarantee for commencement of interim operations at the port. Indian authorities have sought an exemption from the condition arguing that it will be tough to comply in the wake of the sanctions.

But there is another issue too — the need to provide bank guarantees to operate two berths at the port for which equipment has been ordered. This is where a tieup between UCO Bank and Bank Pasargad is seen to be crucial. The partnership can be used for payment of oil purchased from Iran with payment dues for export of Indian products such as rice and engineering goods set off. A similar mechanism was in place during the earlier US sanctions.

The Iranian delegation also expressed its interest in buying Indian locomotives, rail and signalling systems, and engineering goods and generators made by BHEL.

Akhoundi is scheduled to meet commerce minister Suresh Prabhu on Friday, where other trade opportunities are expected to come up for discussions. In the past, India has been keen to export drugs and auto parts although companies have been reluctant fearing sanctions.

One option was to get an Indian PSU to buy the products and ship them to Iran.

Dipak Dash & Sidhartha TNN

Courtesy: Times of India: 07 Sep 2018