There is a big market out there in Iran but only small Indian firms are ready to brave the backlash from the European Union and the US for venturing to the West Asian nation.
According to a Government official, large companies, including from the automobile sector, that have business interests in the Western markets are keeping away from Iran fearing hostile response from European and American customers.
Despite an overall decline in India’s exports in the April-December 2012 period, shipments to Iran rose 8.32 per cent to $2.06 billion.
There is, however, a big trade gap to be bridged, as imports were at $8 billion during the period.
“Iran is interested in buying a wide variety of products from us to ensure that we keep buying crude oil from them. Our exports to the country, too, have increased substantially. But bigger companies are keeping away as they fear losing business in the EU and the US,” the official told Business Line .
“Another aspect on why Iran needs to buy from India is that the West Asian country that is now paid in rupee for all trade with India needs to use the Indian currency, which otherwise will lie unproductively in its accounts.”
Farm, food items
Suppliers of farm and food items such as rice, oilmeal and soya are expanding their exports to Iran, said Rafeeque Ahmed, President, Federation of India Export Organisations.
“Companies that want to sell to the Western markets are not confident enough to explore Iran as they fear losing their other buyers,” Ahmed said.
Several industry delegations from a number of business chambers and export associations from diverse sectors, including pharmaceuticals, engineering products, rice, automobiles, edible oils and other food products, have visited Tehran over the past year.
“Initially, even Tier-I businesses, including leading Indian automobile companies, visited Iran to explore business opportunities. But most large companies have now backed out as they have got indications from their buyers in the Western markets that they wouldn’t be welcome to continue to do business there,” the official said.