April 21, 2014 12:02:06 am
With the Western nations easing sanctions on Iran, the country’s biggest steel maker SAIL is all set to sign a definitive agreement to supply steel worth nearly Rs 15,000 crore to help Tehran set up a railway network project spanning over 15,000 km to connect its major ports and key production centres.
Khaleel Rahim, chairman of state-owned trading firm State Trading Corporation (STC) is slated to visit Tehran this week to finalise some of the formalities that could pave the way for steel exports from India.
Iran had sought Indian investment in massively expanding its railway network and needs about 3 million tonnes of steel rails to connect all major cities, industrial centres and also ports for faster evacuation of goods.
Last year, Washington had eased sanctions on Iran, which has enabled Indian companies to explore investment options. The commerce ministry officials had in December last year, met the top brass of SAIL, BHEL and railway infrastructure builder IRCON to consider investing in the west Asian nation.
Best of Express Premium
A top commerce ministry official told The Indian Express that the STC has been entrustedwith inking definitive agreements with its Iranian counterpart to pave the way for Indian steel exports there.
“Iran is seeking around 3 MT of steel and STC chairman Khaleel Rahim would visit Tehran this week to finalise the formalities,” the official said. Other companies like Jindal, Vizag Steel and Essar are also in the race, a source said.
When contacted, SAIL chairman C S Verma said after several rounds of discussions with the commerce ministry and STC, SAIL has expressed its readiness in supplying 3 MT rail steel. “We are supplying rails to Indian Railways since many years. Our director commercial Vinod Kumar would accompany Khaleel Rahim to help him finalise the modalities,” Verma said.
SAIL’s Bhilai steel plant is the sole supplier of the country’s longest rail tracks of 260 metres. With an annual production capacity of 3.15 MT of saleable steel, the plant also specialises in other products such as wire rods and merchant products.
The commerce ministry official said Indian exporters are banking on the UCO Bank to help implement the rupee payment mechanism. The easing of the payment mechanism has helped propel Indian exports to Iran to over $ 550 million, which, is around eight times the exports few years ago.
UCO Bank, in 2012, began handling payments for India-Iran trade, under which domestic oil refiners buy oil from Iran but make payments into an ‘Iran Account’ with UCO Bank’s Mumbai branch. When Iranians import goods from India, the bank pays the Indian exporters out of this account.
India-Iran trade is expected to cross the $20-billion mark in FY14, up from $15 billion in FY13. India’s exports to Iran include rice, metals, machinery and instruments, primary and semi finished iron and steel, drugs and pharmaceuticals, processed minerals, manmade yarn and fabrics, tea and rubber manufactured items. Imports from Iran include crude oil, urea, petroleum products, saffron and dry fruits.
📣 Join our Telegram channel (The Indian Express) for the latest news and updates
- The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.