Friday, April 13, 2001,
Chandigarh, India


M A I N   N E W S

Vajpayee calls on Khamenei
Offers Iran $ 200 million credit
T.R. Ramachandran
Tribune News Service

Teheran, April 12
Prime Minister Atal Behari Vajpayee concluded the third and penultimate leg of his carefully planned Iranian sojourn by calling on this country’s supreme and all encompassing leader Ayatollah Seyed Ali Khamenei here today.

The discussions between Mr Vajpayee and the Ayatollah assume utmost importance for India and Iran to work jointly for the development and progress of the two countries and meeting the challenges posed by extremist and fundamentalist forces to destabilise the situation in Asia particularly in the Gulf region.

It is no secret that striking a partnership with present day reformist Iran on any front without the benign approval of Ayatollah Khamenei would have tantamount to shadow boxing.

The Iranian leadership has hailed Mr Vajpayee’s four-day official visit as “path breaking and a turning point” in bilateral relations. The Iran Declaration and the clutch of agreements signed in varied fields has added an entirely new dimension to New Delhi’s engagement with Teheran.

Mr Vajpayee’s 30-minute meeting with Ayatollah Khamenei at the fortress-like and high security “Beit-e-Rahbari (House of the Leader)” in Central Teheran, therefore, signals an unambiguous message of affirmation at the highest level of taking Indo-Iran to a new sign.

The Prime Minister reaffirmed India’s commitment to put New Delhi’s traditional relationship with Teheran on a higher footing by providing it direly needed economic content besides galvanising the international community to deal effectively with the debilitating effects of international terrorism.

In a bid to provide multi-dimensional economic content to Indo-Iranian relations far beyond the energy sector, the Prime Minister strongly suggested examining a preferential trade agreement between the two countries backed by the necessary financial and credit facility.

Setting the pace, he offered straightway a line of credit of $200 million to Iran for supporting India’s participation in Iran’s third economic development plan particularly the infrastructure projects. He said the terms and conditions of the credit could be worked out in due course to the mutual satisfaction of both countries.

Acutely aware that lack of credit can adversely affect India in making its presence felt in this region, the Prime Minister disclosed that the Reserve Bank of India would accord the necessary permission to the Tejarat Bank of Iran to open a branch in India. He fervently hoped that Iran would also facilitate the opening of the branch of an Indian bank in Iran.

Addressing the business leaders of both the countries at the Iranian Chamber of Commerce, Industry and Mines, the Prime Minister suggested that joint ventures and boosting bilateral economic cooperation must be accorded priority. In this context he said the two sides could consider six areas encompassing coastal based power stations, value added industries based on downstream hydrocarbons ventures, petrochemicals, fertiliser and ancillary units emerging from oil and gas industries.

Simultaneously, Mr Vajpayee underlined the need to enlarge cooperation in the new areas of the economy like Information Technology, telecommunications, electronics, remote sensing, communication satellite launch vehicles and oceanography.

He said Iran’s strategic location providing access to Central Asia and adjoining regions, the international South-North corridor agreement among India, Iran and Russia and Turkmenistan provided fresh opportunities for enabling Indo-Iranian cooperation to realise its full potential. He had no doubt that India and Iran were poised to play an important role in the development of Asia, Mr Vajpayee added.

The Prime Minister’s announcement of a line of credit comes in the wake of China already having stolen a march over India aimed at tapping the prospective Iranian market.

The FICCI delegation led by its president Chirayu Amin specially called on Mr Vajpayee yesterday afternoon and briefed him about the emerging dynamics in Iran and the Gulf region. They impressed upon the Prime Minister that without a line of credit it would be difficult for Indian companies to take up joint ventures in Iran with an equity participation of up to 49 per cent.

Clearly, the Prime Minister has found substance in genuinely providing the stage for Indian private sector’s participation in this country in the fields of power generation, chemicals, biotechnology, engineering, pharmaceuticals and information technology.

Mr Amin informed Mr Vajpayee that Iran’s economy had improved in the last six years through it was unlikely to leapfrog. At the same time there were enough indications that the Iranians were keen on keeping in step with changing times and globalisation. Indian business also sees for itself opportunities in Iran as the country has plans to disinvest in more than 200 state-owned enterprises. In this context he said that BHEL was negotiating setting up a 400 mw power project in Iran.

India has an adverse trade balance with Iran. Bilateral trade totalled about $1.17 billion with crude oil accounting for the bulk of the imports.

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