Escalation of tension between US and Iran will impact India’s exports to Gulf nation: FIEO
New Delhi/UNI: Escalation of tension between the US and Iran will have implications on India's exports to the Persian Gulf nation, Federation of Indian Export Organisations said on Tuesday.
Tensions between Iran and the US increased after an American drone strike that killed top Iranian General last week. Iran is a key trading partner of India.
FIEO chief President Sharad Kumar Saraf said so far exporters have not flagged any concerns related with exports to Iran. "However, if the tensions escalates, it may have an effect on India's exports to Iran," added Saraf.
He also said due to existing trade sanctions on Iran, Iranian shipping lines are only taking Indian consignments to that country. Iran’s major exports to India are oil, fertilisers and chemicals, while it imports cereals, tea, coffee, basmati rice, spices and organic chemicals, among others said Mr Saraf.
The FIEO President also added that India's exports to Iran during 2018-19 were USD 3.51 billion, while imports were USD 13.52 billion. The trade imbalance is mainly because of India's import of oil from Iran.
Mr Saraf was also of the view that Iran holds huge export opportunities in sectors such as agriculture, chemicals, machinery, pharmaceuticals, paper and paper products, man-made fibre and filament yarn and essential oils.
Oil prices settled up for a third day in a row after hitting near four-month highs at above USD 70 per barrel as the US killing of an Iranian general raised fears of war in the world’s top hub for crude production.
Brent, the global benchmark for crude, settled up 31 cents, or 0.5 per cent, at USD 68.91 per barrel on Monday as oil traders sent prices higher in the aftermath of the US drone attack near Baghdad airport on Friday that killed Qasem Soleimani, the commander of Iran’s Revolutionary Guards’ Quds force.
Oil prices have spiked from a rash of tensions following Soleimani's killing.
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