In a development that augurs well for both India and Iran, the latter country has expressed an interest to double bilateral trade to US$30 billion in the next 5 years by signing a Bilateral Investment Protection Treaty with India. Iran has also invited Indian companies to invest in some of the SME-concentrated sectors such as automobiles, transportation & machinery, chemicals & pharmaceuticals, textiles and food and agriculture, among others.

This development spells great news for Indian SMEs planning to expand their businesses to Iran or which are already catering to the country, as it is likely to enhance their business opportunities further. Significantly, trade between India and Iran has witnessed a more than 60% rise in the last 3 years and the present trade volume between the two countries stands at US$15 billion.

The Iran government has also pledged to facilitate India’s entry into the CIS markets, especially in countries like Russia, Armenia, Georgia and Azerbaijan, which is likely to give Indian SMEs access to newer markets. Notably, most of the products shipped to Iran from India, such as pharmaceuticals, fine chemicals, agro products, agricultural chemicals, processed minerals, textiles, machinery and instruments and rubber products are manufactured and exported by SMEs.

Incidentally, not so long ago, the hike in import duty on rice by the Iranian government to touch 45% from 41% in September 2009 made it difficult for numerous rice exporting Indian SMEs to export the commodity. With Iran expressing its intentions to facilitate bilateral trade between the two countries, it is likely that Iran will look into the issue of rice exporters too.

Sreemita Bhattacharya