How Iran can use rupees to build strategic trade with India
Iran and India’s signing of an agreement for how Iranian oil export proceeds can be used could turn into a blessing in disguise for the Islamic Republic.
Earlier this month, Iranian and Indian officials finally reached an agreement on how India will pay for its oil imports from Iran. The agreement was finalized during Iranian Foreign Minister Mohammad Javad Zarif's visit to New Delhi on Jan. 7-10, in which he headed a high-ranking economic and political delegation. The accord stipulates that Iran’s revenues from oil exports to India will be deposited in a rupee account in the state-owned UCO Bank. The funds will be exempted from hefty withholding taxes and can be used to purchase goods from the Indian market, paying for diplomatic missions, investing in the stock market or any other related aim that Iran desires. It was also agreed that Iran’s Bank Pasargad will open a branch in New Delhi and that Tehran will be able to transfer its export revenues to the bank as well.
The landmark agreement has several important implications.
