With Biden at helm in US, India-Iran trade prospects may improve: Exporters
Iran is expected to be the biggest beneficiary of change in the US presidency that will not only help India to start its oil imports from Iran, but also boost its exports to the Gulf nation as a restoration of trade ties with Iran can easily add about $3 billion of exports, the Federation of Indian Export Organisations (FIEO) said on Wednesday.
India is presently exporting only food, pharmaceutical products and medical equipment to Iran on humanitarian grounds, under the rupee trade mechanism, but money in the account is fast depleting, it said in a statement. “A restoration of trade ties with Iran can easily add about $3 billion of exports from India raising it to over $5 billion,” it said.
Exporters are hopeful of better trade relations with the US after President Joe Biden assumed charge on January 20. “He is expected to bring stability and predictability to global trade and economy which itself will push global economy and global trade growth. He does not believe that the trade is zero sum game and thus, would not be unduly concerned with the trade deficit with India which US is having for over 20 years and which is now declining on year-on-year basis, particularly as India is importing oil and gas from US besides aircraft and defence equipment,” it said.
“He may also bring back GSP to the negotiating table as GSP [Generalized System of Preferences] is a non-reciprocal gesture but Mr [Donald] Trump brought element of reciprocity into it and insisted for relaxation in price control on medical devises and access to its dairy products,” it added.
As part of trade negotiations with the US, Indian exporters expect the reinstatement of GSP benefits, which were withdrawn last June by the Trump Administration. The scheme allowed zero tariffs on exports to the US worth $5.6 billion.
FIEO also expects relaxation in H1B visa by the new President would benefit India’s information technology (IT) and software exports.
The exporters’ body is also expecting positive developments in trade negotiations. “Multilateral institution like WTO [World Trade Organisation] will get more support and it will benefit India as we don’t have many effective FTAs [Free Trade Agreements],” it said.
“Trans Pacific Partnership, a brainchild of former President Barrack Obama, a democrat and mentor of Mr Biden, may be revived and US may ask India to join as it excludes China,” it said.