TEHRAN- Economic and political relations between Iran and India date back to centuries ago and the two countries have kept their ties throughout many turbulences and ups and downs.

India is the only foreign country that is currently participating in a major development project in Iran despite the U.S. sanctions.

The Chabahar Port development project, in southeastern Iran, is the anchor for the expansion of economic relations between the two nations.

The Tehran Times invited Indian Ambassador to Tehran Gaddam Dharmendra to an interview on Tuesday in which we talked about the two countries' current economic relations and also the landscape for the future.

What comes below is a summary of the interview:

Q: Mr. Ambassador please give us a summary of Iran and India’s current economic relations and how you see the future of these ties?

Well, Iran is a very import trade partner for us, and this year, especially, is more significant since it marks the 70th anniversary of the beginning of the two countries' political relations which was started after the signing of a treaty between the two sides.

Iran and India’s relationship is not something new, it is very robust and goes back to centuries. We have a very strong foundation to build upon and that is how the two sides’ leaders are stressing the need for expanding relationships in all areas.

We are also neighbors, we are maritime neighbors, and now with Chabahar port as the anchor of the two countries' trade relations, we have become maritime partners as well.

Prime Minister Modi and President Rouhani have met four times this year and that is the indication of how important the relations are for both sides.

As you see, our economic relations continue despite all the limitations and challenges.

India was the first country that put in place a banking mechanism to be able to trade with Iran in national currencies.

This rupee-rial channel is being facilitated by the Central Bank of Iran (CBI) and the Reserve Bank of India (RBI). It has helped the traders in both countries for the exchange of commodities.

UCO Bank is also the Indian partner in this mechanism and we have a set of six banks on the Iranian side that are designated by the CBI and trade is going on through these banks.

Currently, India mostly exports agricultural items like tea, rice, and some spare car parts to Iran and in return, Iran also exports to India.

However, we are encouraging the expansion of trade to other areas, since Iran’s economy is diversified and it is no longer only oil-driven and there are many potent areas for cooperation like services, manufacturing, and light engineering.

In terms of the volume of trade, unfortunately, the trade has fallen significantly this year due to the pandemic and it is estimated that since the beginning of the current year so far the trade turnover between the two sides stands at nearly $4 billion.

That is the vision, that is what Prime Minister Moddi and President Rouhani have identified as the core strategies for the expansion of trade ties between the two sides, and we will do our bests to realize this vision.

Q: You mentioned the expansion of ties in new areas, what have you done in this regard?

As for the expansion of trade to new areas we have been in talks with both Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) and also Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIMA) from the Iranian side and as for the Indian side, Federation of Indian Chambers of Commerce and Industry (FICCI) as well as the Associated Chambers of Commerce of India (ASSOCHAM).

Now we are working to get these sides to hold talks and discuss new areas for cooperation.

The Iranian chambers have given me a list of items they want to trade with India and the Indian side as well have done so, and what we are doing is to consider barter trade as well, that is exchange of goods between the two sides.

Q: How much the pandemic has affected the two sides’ trade and what you have done to mitigate the situation?

We have to look for ways to continue engagement when the world is being disrupted by this corona pandemic, and we also have to see how the landscape of the world is changing to be able to make plans for the future.

Of course, the coronavirus has affected countries all over the world at various levels, but, the business of governments must go on, so I and my colleagues have been interacting with various ministries even during the pandemic to see what we can do to boost the trade relations.

As for economies we have to answer questions like how do supply-demand chains work, how manufacturing will be affected, how to manage your dependency on us and our dependency on you for exchange of goods, how should we work around these challenges, and so on?

So, what we are doing is to reach out to Iranian economic bodies in every area like the chambers of commerce, CBI, etc. to find ways for the further expansion of the trade ties between the two countries.

In some areas we are planning to hold some online meetings between the two sides, we are also looking at other programs.

Q: How is the Chabahar development project proceeding?

We are grateful that Iran has trusted India with the first phase of developing Shahid Beheshti port in Chabahar.

Currently, Indian partners are using Iranian facilities in the port but we have placed orders for the necessary equipment from China, Italy, Finland, and Germany and hope that the first delivery will be in October.

We see Iran as a pivot for our economic interactions with Central Asia, with Eastern Europe through Azerbaijan and with CIS countries. For this we have two transport corridors, one is Chabahar as the gateway to Central Asia and the other is Bandar Abbas.

We have also partnered with Afghanistan to transit goods through this port.

Iran, India, and Afghanistan have signed a trilateral agreement based on which India uses Chabahar port as a launchpad to supply goods, and equipment to the country and vice versa.

The vision has been given by the leaders of the two countries and we are trying to implement that vision.

To put it in a nutshell, the development of the port is going on smoothly and in the one year that India has started activities in the port the volume of shipments and transit through the port has increased significantly.

Q: How are talks on the preferential trade agreement between the two sides progressing?

Several rounds of talks have been held regarding the preferential trade agreement between the two sides and based on the outcomes of the previous round of talks in February the two sides exchanged the lists of commodity items and the next meeting will be held at the end of the current month to discuss the results.

Q: what about the talks on Farzad-B gas field, is there a chance that India would continue this project?

Regarding the Farzad-B development project unfortunately there has been no progress in the talks but we are hopeful about the future.

When the political turbulences are calmed and our energy cooperation is resumed we definitely look for cooperation in many energy-related projects, and Farzad-B is one of them.

EF/MA