Rupee Settlement Promotes India's Export To Iran Textiles

Because of Western sanctions against Iran, India Spin Commodity exporters find that the India Iran trade crisis provides them with an opportunity. The textile industry expects the rupee settlement mechanism between the two countries to promote the export of India textiles to Iran. Nair, Secretary General of the India Textile Industry Federation, said that India imported oil from Iran, and some of its payments were retained in India by the rupee fund managed by UCO Bank (45% of the oil imports paid in the rupee account). DK

Iran textiles and clothing After obtaining the government's permission, the buyer can apply for a letter of credit through this fund. Iran exporters will pay the India rupee from the bank account. In addition, he said, there will be no shortage of funds in this account. In fact, rice exporters are already using the system.

In the 1-2 month of this year's visit to Iran, the Federal Ministry of textiles launched an initiative to hold a trade fair in Iran in May. The effect of the exhibition is encouraging, and the export of India textiles to Iran will increase. Nearly 60 home textiles and Clothes & Accessories Exhibitors are expected to reach $22 million 500 thousand. An official of the Ministry of textiles said that the in-depth cooperation with Iran will transform into India textiles and export to Iran for over 100 million US dollars. Demand for cotton, man-made fibres and textile machinery has increased.

In the last fiscal year, India's textile and clothing exports to Iran amounted to 108 million US dollars. But Iran should lower tariffs and make India products more competitive, Mr. Nair said. India's textile industry accounts for about 14% of the total domestic industrial production and 10% of its total exports, and its subsidy amount is about 310-320 billion US dollars. The industry employs 35 million, second only to agriculture. According to the statistics of India textile Commissioner's office, in May this year, the output of cotton yarn in India reached 307 thousand tons, an increase of 7.4% over the same period, increasing for thirteenth consecutive months.

Iran exports $11 billion 500 million to India every year, and India exports to Iran about US $3 billion 300 million. The official said that the trade deficit between Iran and India was one of the reasons why India textile was particularly concerned about Iran's exports. As an important export industry in India, the government has taken measures to subsidize textiles. According to the WTO agreement on subsidies, countries are allowed to provide export subsidies to domestic industries, as long as the industry's share of world trade is less than 3.25%. But India's textile exports account for 4% of the world's share and have been increasing in the past 5 years. According to the WTO rules, India needs to cancel its export subsidies to textiles by 2015.

Manickam Ramaswamy, President of the cotton textile export promotion association, said Iran could become an important market for India textile exporters. When exporters negotiate with Iran in dollar terms, they also win the buyer's consent to use rupee settlement according to the rupee payment mechanism.

According to Anil Rajvanshi, vice president of the synthetic and rayon Textile Export Promotion Association, "it looks as if Iran will be a large market for acrylic yarn and fiber, synthetic fiber and synthetic fiber and jute." Since the rupee payment mechanism is a new way of payment, it will start to be a bit of a problem. But "we must see the potential of the market." For India exporters, relying on the US and European markets will be very dangerous, so they must find alternative markets. "