Further escalation in US-Iran tension may affect India's exports: FIEO
Further escalation in the tension between the US and Iran will have implications on India's exports to the Persian Gulf nation, apex exporters body FIEO said on Sunday. Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said so far exporters have not flagged any concerns related to exports to Iran.
"However, if the tensions will continue, it may have an effect on India's exports to Iran," he said.
He added that due to existing trade sanctions on Iran, Iranian shipping lines are only taking Indian consignments to that country.
Tensions between Iran and the US increased after an American drone strike killed top Iranian general Qasem Soleimani last week.
Iran is a key trading partner of India. Its major exports to India are oil, fertilizers, and chemicals, while it imports cereals, tea, coffee, basmati rice, spices, and organic chemicals, among others.
India's exports to the Persian Gulf nation in 2018-19 were worth USD 3.51 billion (about Rs 24,920 crore), while imports were valued at USD 13.52 billion (about Rs 96,000 crore).
The trade imbalance is mainly because of India's import of oil from Iran.
Both countries are holding negotiations for a bilateral preferential trade agreement (PTA) to increase trade.
Unlike a free trade pact, where two trading partners significantly reduce or eliminate duties on the maximum number of goods traded between them, PTA involves the removal of duties on certain identified products.
FIEO had earlier said that Iran holds huge export opportunities in sectors such as agriculture, chemicals, machinery, pharmaceuticals, paper, and paper products, man-made fiber and filament yarn and essential oils.
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