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India and Iraq will look at the possibility of trading in their local currencies, Commerce & Industry Minister Anand Sharma has said. This would insulate India’s oil imports from Iraq from the volatile movement of the Indian rupee against the US dollar.
“We are exploring the possibility of trading in local currencies, the dinar and rupee. Our officials will discuss this,” Sharma said on Friday, addressing a session organised by Indian business chambers with Iraqi Prime Minister Nouri Kamil Al-Maliki.
The Iraqi PM, too, assured industry that his Government was aware of exchange-related problems. “We are working to resolve the problem,” Al-Maliki said answering an industry representative who raised concerns about exchange rate losses.
The meet was organised by industry chambers CII, FICCI and Assocham.
Sharma also stressed on Iraq’s growing importance in meeting India’s energy needs
“Iraq has emerged as the second largest exporter of oil to India. In the coming months, no doubt it will compete for the top spot,” the Minister said.
India imported 24 million tonnes of crude from Iraq in 2012-13, which was second only to Saudi Arabia. Iraq toppled Iran as the second largest supplier of oil to Iran more than a year back, following US and EU sanctions on the country.
Pharmaceuticals, health services, IT and auto components are the other areas where Iraq holds huge opportunities for Indian business, the Minister said.
Al-Maliki said Iraq had missed out on a number of opportunities during the years of dictatorship and wanted to learn from India’s experience and expertise. Apart from trading in oil, Iraq and India could form partnerships for exploration of oil and building of oil refineries. Agriculture, health and education, too, held a lot of prospects.
The two countries are looking at finalising a number of MoUs in areas such as the energy sector, fertiliser, agriculture, trade, healthcare, legal assistance and science and technology. Many of these MoUs are expected to be signed during the Iraqi PM’s on-going visit.
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