New Delhi: Undeterred by Western sanctions against Iran over its nuclear programme, India is considering a proposal to liberalize its business visa regime with the Gulf nation to boost exports and narrow its trade deficit with the country.

The commerce ministry has proposed to the home ministry that the business visa regime with Iran be liberalized to allow more visitors from that country. Since Iran is considered a sensitive country from a security perspective, getting an Indian business visa is a time-consuming process.

If India could liberalize the visa regime with Pakistan, there was no reason the same can’t be done with Iran, a commerce ministry official said on condition of anonymity.

“And technically, Iran is a far bigger market than Pakistan," he said. “Iran is also a rich country, unlike Pakistan, and they have diverse interest in imports."

The home ministry is likely to decide in two weeks on setting a timeframe within which security clearance has to be given after business visa request is received.

“The home ministry is carefully vetting the proposal of commerce ministry and has taken inputs of various agencies. At present, the Iranian businessmen face inordinate delays in getting visas as they first apply to Indian missions abroad, which send their request to Union home ministry in India," said a home ministry official requesting anonymity.

The move is ill-timed, said a trade expert who spoke on condition of anonymity.

“It does not look like a step in the right direction. The European Union and the US may oppose any move to further deepen ties with Iran," he said.

The commerce ministry official said the multiple exchange rates followed by Iran also hurt India’s export interest, depending on how essential the imports are. While essential items enjoy a favourable exchange rates, non-essential items don’t.

The commerce ministry official said India is trying to persuade Iran to set a single exchange rate for the country’s exporters.

“While currently, almost one-third of our total rice exports are going to Iran, sectors like cosmetics, engineering, automobiles are not doing well due to the multiple exchange rate regime," the commerce ministry official added.

If India can do away with such impediments, then “we can easily increase our exports from currently $2 billion to $6-7 billion in two to three years," he added.

The commerce ministry is also planning a textile trade show in Iran and an India trade show later in September-October. “Certainly, Iran is on our radar. In a total trade of $12 billion, we have a trade deficit of $9-10 billion. So, we obviously want to export more to Iran," he added.

Since India isn’t able to pay for oil imports from Iran due to international sanctions and they lie in rupee accounts, Iran will be encouraged to import more from India, said Ajay Sahai, director general of the Federation of Indian Export Organisations.

“Pharma exports to the country have seen huge growth in recent times. There are a lot of enquires for steel also. This is the right time to boost our exports to Iran," he said.

However, Manoj Pant, a professor at the School of International Studies at Jawaharlal Nehru University, said while the intention behind boosting exports to Iran seems to be genuine, he does not see this happening in the short run since the country is flooded with Chinese goods.