Will sign preferential tariff agreement with India soon, says Iranian envoy

Iran will soon sign a preferential tariff agreement with India that will slash tariffs on a large number of traded goods, Iranian ambassador to India Ali Chegeni said on Wednesday.

 

Many important items will be made zero duty as part of the deal, with a commitment to reduce tariffs on many others, he said, addressing Indian investors at the PHD Chamber of Commerce.

 

Till now, four rounds of negotiations have been completed and the last one was held in March in Tehran where both countries discussed a draft text of the pact. Sources said the next round will soon be held in New Delhi.

 

Along with the trade deal, a bilateral investment protection agreement and a double taxation avoidance agreement are also in the works and Iran is confident of signing off on all three deals by end-2019, diplomatic sources said.

 

Betting on trade

 

Bilateral trade stood at $17 billion in 2018-19 with exports from India at only $3.5 billion.

 

Apart from petroleum, major imports from Iran, include fertilisers and chemicals, while exports include cereals, tea, coffee, spices and organic chemicals.

 

India is the 5th largest source of imports for Iran, while being the 6th largest destination of exports. While the majority of outbound trade from Iran continues to be crude oil and related items, non-oil exports from Iran to India rose by 18 per cent in 2018, as compared to the year before, Economic Counsellor in the Iranian Embassy Asghar Omidi said.

 

While Indian exports of man-made textiles are slowly increasing, Indian companies have been unable to use market access in pharmaceuticals, according to the Federation of Indian Exports Organizations.