New Delhi: Seeking to encourage trade with Iran, the government has allowed exports of imported goods, with 15 percent value addition, against realisation of proceeds in Indian rupee.
The Directorate General of Foreign Trade (DGFT) released the notification for this policy on June 6, but said that it would notify the countries from time to time.
"Accordingly, exports of such goods to Iran which have been imported against payment in freely convertible currency would be permitted against payment in Indian Rupees also, subject to at least 15 percent value addition," the DGFT said in a notification yesterday.
Hailing the move, Federation of Indian Export Organisations (FIEO) President Rafeeq Ahmed said that the step would benefit Indian exports to Iran in the current fiscal.
Ahmed said the value of Indian exports to Iran is expected to touch USD 6 billion in 2013-14 from USD 4.5 billion at present.
"The opening of letter of credit from Iran under the rupee payment mechanism has been impressive touching about USD 400 million on monthly basis.
"With the new provision being put into place, we can look for exports close to USD 6 billion in 2013-14," Ahmed said in a statement.
He suggested, however, the government should put a cap on such exports so that the basic idea of promoting manufactured exports from the country remain in focus and the new provision is tested on a limited scale.
India's imports from Iran, which mainly comprise crude oil, are expected to fall to around USD 10 billion this financial year because of decline in oil prices, he added.
First Published: Tuesday, June 11, 2013, 22:00