Iran is aiming to conclude a preferential trade agreement with India by the end of 2019 and hopes it will pave the way for barter trade in agriculture and pharmaceutical goods.

Iran’s ambassador to India Ali Chegeni has said the two countries have held four rounds of talks so far while another round is expected next month.

“We could do barter trade with India agriculture against agriculture, pharmaceutical against pharmaceutical and so on,” Ali Chegeni said at an interactive session with Indian businessmen organised by the country’s top trade body PHDCCI on Wednesday.

The ambassador pointed out that US economic sanctions could not derail Iran’s strong trade relations with India, with bilateral trade surging to $17.50 billion in 2018 from $13.5 billion in 2017. “There is scope for bilateral trade to rise to $30 billion soon and then to $50 billion.”

The two countries were expected to provide an impetus for trade through an agreement which would complement the October 2018 reactivation of the Rupee payment mechanism; the countries adopted the alternate payment system due to the re-imposed US sanctions against oil imports from Iran, which affected the SWIFT network.

In July this year, India’s Minister of State for External Affairs V. Muraleedharan reaffirmed that India’s bilateral relations with Iran “stand on their own and are not influenced by India’s relations with any third country”. Nevertheless, India had stopped purchasing Iranian crude due to US sanctions.

Earlier this week, French President Emmanuel Macron urged US President Donald Trump to foster peace by revoking the suspension on the sale of Iranian crude to India. Iran is the third-largest supplier of crude oil to India.

Iran reportedly wants to coordinate the export of at least 700,000 barrels of oil per day, and ideally up to 1.5 million bpd, in exchange for agreeing to adhere to the 2015 Nuclear Deal.

India had initially opted to comply with the US sanctions after the Trump administration decided to end the last November waivers on 2 May, previously granted to Iran’s eight top oil customers — China, India, Italy, Japan, South Korea, Taiwan, Greece, and Turkey.

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