TEHRAN- Iran and India held a new round of negotiations on signing a preferential trade agreement (PTA) between the two sides, in Tehran on Wednesday and Thursday.

Initiated in 2016, the negotiation on this agreement is said to be in the final stages, and the two sides hope that the list of the commodity items entitled to preferential tariffs will be finalized in the next round of the talks.

During the previous (fourth) round of the negotiations, which was also held in Tehran, the two countries discussed draft text of the agreement which is to reduce tariff rates by 25%-45%.

And in the fifth round of the talks held at the place of Iran’s Trade Promotion Organization (TPO), some clauses of the pact remaining from the previous talks were reviewed and discussed, said Hossein Bamiri, the secretary of TPO’s Iran-India Desk.

As reported by TPO, Iranian delegation participating in this round included Reza Seyed Aqazadeh, director general of TPO’s Asia-Pacific Office, Hossein Bamiri, the secretary of TPO’s Iran-India Desk, Mir-Hadi Seyedi, TPO’s advisor in international affairs, Zahed Talaban, international expert at TPO, and representatives from the ministries of agriculture and health, Veterinary Organization, National Standard Organization, and some other organizations.

Signing the preferential trade agreement lays a competition ground for Iranian companies to enter the Indian market, Bamiri said, adding, “In this round of the talks we tried to reduce tariffs for those commodity items that we have high potential in their production and export.”

“If tariffs are reduced and other extant barriers are removed, we can strengthen our entrance to the Indian market through the PTA”, the official emphasized.

Iran’s major exports to India are oil, fertilizers and chemicals while imports include cereals, tea, coffee, spices and organic chemicals.

The value of India’s exports to Iran stood at $2.65 billion in 2018, while imports were valued at $11.11 billion. The trade imbalance is mainly because of India's import of oil from Iran.

Signing this PTA is of great significance for India, as the country will be able to diversify its export basket which is now limited to agricultural products, Trade Promotion Council of India (TPCI) Chairman Mohit Singla has declared.

"With a carefully designed PTA, strategic products such as leather, textiles and readymade garments, which attract very high duties in Iran can become naturally competitive and India will be able to leverage its export strengths," The Economic Times reported quoting Singla.

Preferential trade between the two countries is a priority in India’s future plans for trade with Iran, according to Indian Ambassador to Tehran Gaddam Dharmendra.

The two countries were supposed to finalize the preferential trade agreement by the end of 2019, a target that has not come true in due time.

Addressing an Interactive Session on Business Opportunities in Iran held in New Delhi in last August, Iranian Ambassador to India Ali Chegeni had said, “Very few formalities remaining to be completed on this front will be accomplished shortly with 5th round of talks between the authorities of the two countries here in New Delhi before it becomes a reality by end of 2019.”

While the agreement has not been reached at the projected time, the two sides resolve to finalize it as soon as possible to further promote bilateral trade.