The move is expected to facilitate Indian businesses to trade on easier terms with Iran in the backdrop of US sanctions
New Delhi: India has allowed an Iranian bank to open a branch in Mumbai, Union minister Nitin Gadkari said on Tuesday, announcing a move seen aimed at circumventing US trade and investment sanctions as India builds a strategic port in the West Asian country.
The bank will open its branch in the next three months, shipping, roads and highways minister Gadkari said after a meeting with Iran’s foreign minister, Mohammad Javad Zarif.
Iran’s Pasargad Bank has received the necessary clearances to open its branch in Mumbai, said a person familiar with the development on condition of anonymity.
“The government of India has given permission to the Iranian bank to open its branch in India in Mumbai within three months," Gadkari said.
Alongside, India’s UCO Bank will open a branch in Iran, said a Press Trust of India report quoting the Iranian minister.
“We are very happy that both UCO Bank from India and Pasargad Bank from Iran are getting started with the business," Zarif was quoted as saying.
The two banks will facilitate transactions relating to operation of berths at Iran’s Chabahar Port that India is developing. The move is also expected to facilitate Indian businesses to trade on easier terms with Iran in the backdrop of the US placing Tehran under crippling sanctions with embargos on dollar trade. Iran is one of India’s top sources of oil and though New Delhi has reduced its imports under US pressure, it has conveyed to Washington that oil imports cannot be done away with.
“Proposals on barter (trade) system between the two nations can also be considered," Gadkari said.
On India developing Chabahar Port, Gadkari said he had “good discussions with the minister (Zarif). The first ship from Brazil has already been received at Chabahar... The financial arrangement is ready. There were some problems, but we have resolved the issues."
India has started its commercial activities in Chabahar within the framework of a 2016 trilateral deal that also includes Afghanistan and is aimed at developing the southern Iran port into a regional trade hub.
India has taken over operations of the Chabahar port in the Sistan-Balochistan province of Iran, the first time India will operate a port outside its territory.
The heads of the Indian, Iranian and Afghanistan delegations jointly inaugurated the office of the India Ports Global Chabahar Free Zone at Chabahar last month.
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