India and Iran need to take immediate steps like enhancing cooperation in the banking sector and rationalising duties on agri commodities to boost bilateral trade, exporters' body FIEO said.
The Federation of Indian Export Organisations (FIEO) has demanded a significant cut in import duty by Iran on basmati rice.
"The import duty on our basmati rice is about 45 per cent. Iran should reduce it to about 20 per cent. There is huge potential to increase basmati rice exports from India. We have requested Iran to cut the duty," FIEO Director General Ajay Sahai said.
Iran produces about 2 mt of rice against the demand of about 3 mt and imports the commodity mainly from India and Pakistan. The aromatic rice is grown only in these two countries.
Sahai, on the other hand, urged the RBI to grant permission to Iranian banks to open branches in India as that could help facilitate bilateral trade.
According to him, five Iranian lenders Bank of Pasargad, Saman Bank, Parsian Bank, Bank Mellat and Persia International Bank have applied for setting up branches in India.
Asked how the payments issue is being resolved between the two countries, he said certain Indian banks have come forward to open Vostro and Nostro accounts in overseas banks to facilitate trade payments.
Nostro and Vostro accounts are opened by banks that act as caretaker to facilitate trade.
The two-way trade between the countries declined to USD 9 billion in 2015-16, from USD 13.13 billion in the previous fiscal.
The commerce ministry in November 2016 launched a portal to provide relevant information and an e-marketplace for buyers and sellers of India and Iran.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)