Persian Bank to reduce Letter of Credit opening margins
Notwithstanding the threats by the U.S. Government to impose sanctions against India for its continued engagement with Iran, the high-level business delegation has returned after a week-long trip.
It is buoyant about the huge potential that Iran offers to Indian companies, especially in the field of foodgrains, pharmaceuticals, power and food processing sectors.
The 80-member delegation led by Joint Secretary in the Ministry of Commerce, Arvind Mehta, and comprising various business organisations, has termed its recent trip to Tehran as good and fruitful. “We discussed tremendous opportunities in the fields of foodgrains, food processing, tea, pharmaceuticals, power sector and other areas of mutual trade. Iran provides India with a new and strong market and every effort should be made to top this potential,” Federation of Indian Export Organisations (FIEO) President Rafeeque Ahmed, who led the delegation, told this correspondent.
Mr. Ahmed said that the rupee payment issue had been resolved and there had been a broad consensus that more banks should be added and margins of the banks in Iran be lowered to facilitate Indo-Iran trade. “Rupee mechanism issues have been sorted out with active involvement of FIEO, UCO and Persian Bank. Few more banks will be added to facilitate banking transactions after Navroz holidays in Iran,” he added.
The Persian Bank has agreed to reduce Letter of Credit (LC) opening margins from 120 per cent to 10 per cent which will be a great move forward. “Dealing in Indian rupee will provide comfort to exporters and will be a natural hedge when high volatility is being witnessed in currencies,” he said.
He said the objective of the delegation was to look for long-term business relationship and not to use the opportunity of sanctions against the age-old friendly neighbours.
Keywords: India-Iran trade