Iran and India agreed to trade Iranian oil for Indian textile machinery, the Mehr News Agency reported following a press statement given by Reza Tofiqi, Iranian Trade Promotion Organization deputy director last Wednesday.
Last weekend, the Combined Indian Textile Exhibition (INTEXPO), an exclusive textile exhibition of over 60 Indian firms, was held in Tehran. The exhibition was attended by Textiles Secretary Mrs. Zohra Chatterji, who called India’s trade relations with Iran “vibrant” and praised INTEXPO as an important step in strengthen bilateral trade.
Chatterji told the press that Iran currently imports 13% of its textile machinery from India, but the figure could potentially double.
Currently, India and Iran have a bilateral trade agreement that bypasses Western sanctions, but so far the trade is deeply unbalanced: while the value of India’s exports to Iran last year totaled just under $3 billion, the value of exports from Iran to India were around $11 billion. India is one of Iran’s biggest buyers of crude oil, but as much as 90% of India’s exports to Iran are low-value agricultural goods like basmati rice and soymeal.
India is now looking to increase their exports of pharmaceuticals, medical equipment, auto components, and of course textiles. Last year, Iran agreed to accept 50% of payment for oil exports to India in rupees, instead of the standard US dollars; the new agreement will mean that India can pay for oil with textiles and textile machinery.
Because of declines in oil prices, the value of Iranian exports to India are expected to fall to around $10 billion in the current fiscal year. India hopes to raise the value of exports to Iran to between $4.5 billion and $5 billion in the corresponding year.