Iranian rupee reserves with Indian banks including Industrial Development Bank of India (IDBI) and UCO Bank have declined and for this reason, exports of Indian agricultural products such as sugar, rice and tea to the Islamic Republic of Iran have been affected, according to the “Indian Express” periodical.
Sudhanshu Pandey, India's Minister of Agriculture and Food Products said that Indian Ministry of Foreign Affairs is in talks with the Islamic Republic of Iran on this issue and it is hoped that the two sides will reach an agreement soon and resolve this issue by the end of April.
Islamic Republic of Iran has other foreign exchange reserves with India and “we are negotiating to use these currencies.”
According to the statistics, Islamic Republic of Oran imported 1.1 million tons of sugar from India last year in 2020, the amount of which is one-sixth of India’s total sugar exports to the world markets.
About 30% of India's basmati rice is exported to Iran and Iran is the largest importer of this Indian product in the world.
The rupee-rial mechanism between India and Iran was established in 2012 after Western countries’ economic sanctions imposed against Iran. Under the agreement, 45 percent of Iran's oil money would be deposited in rupees in UCO Bank's account, and Iran would use it to buy goods from India.
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