The Federation of Indian Export Organisations (FIEO), the country's apex body for exporters, has said that the Reserve Bank of India's decision not to process current account transactions with Iran using Asian Clearing Union mechanism is making transactions with Iran difficult.
FIEO said in a statement on Monday that Mr J.K. Jain, Vice-President, FIEO, said in a meeting with the Ambassador of Iran that after the issuance of circular by the RBI on December 27, 2010, stopping payment of remittance from Iran, huge payment of exporters have been blocked by Indian banks even after it has been paid by the Iranian banks. This has disrupted exports to Iran and exporters are uncertain of payments, Mr Jain said.
Another issue raised was with regard to bid bond and performance guarantee for participation in bidding for supply to Iranian companies.
Indian companies interested in supplying to Iranian Government companies are required to deposit some percentage of bid amount for participation in tenders to Iranian banks but are unable to do so because no Indian bank accepts transactions to Iran, the statement said. Indian companies are deprived of the huge opportunities which exist in Iran and it will be a set back to our project exports, it added.
These are hampering India's export to Iran in a big way, FIEO said, adding that, therefore, it wants Indian and Iranian governments to sort out these issues soon.