Rouhani to push for investment

Rouhani to push for investment

Context:

• Indian investment in Iran, including billions of dollars in connectivity, infrastructure and oil projects topped the agenda as Iranian President Hassan Rouhani arrived for a three-day visit to India.

Positive and right track:

• The two countries are on the same positive, right track.
• The Chabahar investment project is a “key objective” for Iran while several MoUs would be signed after his meeting with Prime Minister Narendra Modi.
• The government was committed to “speeding up” work at the Chabahar Shahid Beheshti Project, denying reports that there had been any “slowdown” due to pressure from the U.S.

Threat of sanctions

• The visit, which comes close on the heels of a decision by the Modi government to allow Indians to invest in Iran in rupees signals an independent line from the United States, which is threatening new sanctions against Iran in the coming months.
• With the exception of Bhutan and Nepal, at present all foreign investments to be made in dollars. So investing in rupees in Iran is a step to boost interest in the country.
• The rupee investment plan is expected to ease the path for businessmen wishing to circumvent challenges posed by the current sanctions regime against Iran.

Absence of banking and payment channels:

• Many of the sanctions were lifted after the Joint Comprehensive Plan of Action on nuclear scrutiny was signed in 2015.
• The absence of banking and payment channels has been a challenge for Indian businessmen.
• For addressing banking hassles, discussions on new investment routes, a double tax avoidance agreement, preferential trade agreements and a rupee-rial mechanism is going on.