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In a major relief to exporters of goods to Iran, IndusInd and UCO Banks have withdrawn their advisories instructing that all export transactions with the Islamic republic be completed by October this year.
This follows intervention by the Commerce Ministry, which pointed out to the Department of Financial Services that such restrictions are uncalled for, given India’s position on the US sanctions against Iran.
“Our exporters have confirmed that both UCO Bank and IndusInd Bank have withdrawn their advisories. Now the panic amongst exporters will be over and the situation can return to normal,” said Ajay Sahai, Secretary General, Federation of Indian Export Organisations.
Minister of External Affairs Sushma Swaraj had said on Monday that India recognises only the sanctions announced by the UN, and not by individual countries.
IndusInd and UCO Bank, which handle all the transactions between India and Iran, had issued their advisories after the US decided to withdraw from the nuclear accord that Iran had reached with the US, UK, France, China, Russia and Germany in 2015. Iran had agreed to limit its sensitive nuclear activities and allow international inspectors in return for the lifting of economic sanctions that the Western economies had imposed on it.
“Since the US gives a 90-day grace period to countries to finish off their business with a country against which it applies sanctions, IndusInd and UCO Banks got anxious and gave a timeline of October to Indian businesses. Since UCO Bank has hardly any exposure in the US, there was no need for it to panic. However, the matter has been resolved with the Department of Financial Services stepping in,” Sahai said.
The Centre, however, is watching developments surrounding Iran keenly and is trying to work on a contingency plan in case there is more trouble.
Iran is India’s third largest supplier of oil and the economic sanctions imposed by the West against Iran a few years back had sent the country into a tizzy. India’s export to Iran in 2017-18 was at $3.37 billion while its imports were at $11.11 billion.
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