India’s exports to Iran have increased two-fold in the last couple of years. This has been facilitated by the Rupee-Riyal payment mechanism and supported by the complementarities between the two economies. The potential for bilateral trade, however, has not even been scratched on the surface. Given the significant complementarities between the two economies, project exports to Iran hold out a lot of promise and need to be adequately supported. Keeping in view the long-term potential of project exports to Iran especially in the railways sector, an umbrella financing agreement for rupee credit has been signed between EXIM Bank of India and Iranian banks. For the designated project export contracts, rupee financing is offered through the Export Development Fund being operated through EXIM Bank.
The Rupee-Riyal mechanism has stabilized and is now showing results. Bilateral trade in areas such as meat, agricultural products, gems & jewellery, engineering, pharmaceuticals, automobiles, and auto components is being encouraged. Trade promotion activities are being intensified.