India investment in rupees may boost Iranian economy

New Delhi: With Iranian President Hassan Rouhani beginning his visit to India from Hyderabad on Thursday, Indian government sources have said that New Delhi has recently allowed investment in Indian rupees in Iran. Currently, India allows this facility only in Nepal and Bhutan.

Sources said this will not violate US sanctions on Iran since the transaction will not be in US dollars. The Indian move will hugely help the Iranian economy as it will draw in more Indian investment into Iran. If an Indian businessman wants to invest a certain amount in rupees, he can deposit the money in rupees in the bonafide concerned Iranian account in one of the Indian banks and the equivalent amount of Iranian Rials will then be deposited in the venture in Iran, sources said.

But it is President Rouhani’s expected address of the congregation at the famous Makkah Masjid in Hyderabad on Friday that is seen as a strong push by India for stronger ties with Iran, a country described by Government sources as the “leader in the Shia (Muslim) world”. This will no doubt bring back memories of another visiting Iranian President Hashemi Rafsanjani who had addressed a congregation at Lucknow’s Bara Imambara  in the mid 1990s. Sources said the Iranian President wanted to pray at the Makkah Masjid and had visited Hyderabad before becoming President. The Iranian President is expected to visit either the Salar Jung Museum, Golconda fort or Qutab Shahi tomb too in Hyderabad apart from the Makkah Masjid.

India is also playing a major role in the operationalisation of the Chabahar port in Iran. Government sources said the Chabahar port has already been operationalised and is expected to reach full capacity in the coming months. The Chabahar port in Iran is expected to end Afghanistan’s dependence on Pakistan for transit of goods. Chabahar will also offer stiff competition to the port of Gwadar in Pakistan’s restive Balochistan province which is being developed with Chinese help.  

India, Afghanistan and Iran have been engaged in trilateral cooperation on Chabahar which will lead to establishment of an “International transport and transit corridor between India, Afghanistan and Iran”. Sources said connectivity will be one of the major issues to be discussed between Mr Rouhani and Prime Minister Narendra Modi on Saturday during delegation-level talks. Significantly, the United States had earlier said it had no objection to India’s initiative to operationalise the Chabahar port.

It is however unclear whether the Jadhav issue will be discussed between the two countries during the visit. The situation in Afghanistan is however expected to be another major issue that will be discussed between the two leaders.