On the other hand, thanks to India reducing considerably its import of crude oil from Iran under the US pressure, the country’s overall imports from the key Middle East country saw a sharp decline of about 25 per cent from USD 3621 million to USD 2719 million in the April-June quarter of 2012-13. While India’s total imports have also been dropping, the pace of overall import decline is nowhere near a big decline in imports from Iran and Iraq.
The total Indian imports in the first half of the current fiscal were down by 3.6 per cent to USD 234.8 billion. The crude oil import was the largest item of imports from Iran. As the country faced the US pressure and the payment system for Iranian crude was disturbed, India’s imports from that country had to drop sharply.
But on the other hand, India exported several key food items like wheat and other food grains to Iran which has been hit hard by UN sanctions implemented severely by the US and other developed countries for its purported nuclear programme.
Like Iran, India’s exports to Iraq too showed a huge jump of over 150 per cent in the first quarter of the fiscal 2012-13 from USD 132.8 million to USD 334.5 million in the same quarter last year.
Although the situation in Iraq is not similar to Iran, India’s imports from Iraq also showed a significant drop from USD 5.5 billion to USD 4.6 billion, 16.6 per cent.
Among the OPEC countries, the share of Indonesia, Kuwait and Saudi Arabia in India’s imports increased significantly. In contrast, the share of Iran and Iraq in India’s total imports declined from 3.0 per cent and 4.5 respectively in Q1 of 2011-12 to 2.4 per cent and 4.0 per cent in Q1 of 2012-13
The ASSOCHAM study shows that in the face of Iran and Iraq not having friendly and cozy relations with the western world, India is emerging as one of the major sources of their supplies of essential commodities.
“Irrespective of the pressure from the west, India needs to pursue its economic ties with Iran and other important countries in the Middle-East,” Assocham's President Rajkumar N Dhoot said.
In fact, the apex industry body recently fielded a business delegation to Iran yielding positive results for the relations between the two countries. “We will continue to build bridges between the businesses of the countries,” Dhoot said.
As far as India’s total international trade is concerned, the study pointed out problems in regard to exports because of recession in several European economies and uncertainties in the US.
Lower imports largely reflected slowdown in domestic economic activities, relatively lower international oil prices and decline in demand for gold imports.
Slower growth in imports of petroleum products at 6.0 per cent during H1 of 2012-13 as compared with 51.8 per cent during H1 of 2011-12 largely reflects the moderation in international crude oil prices as compared with the corresponding period.