India-Iran Current Affairs

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India receives first Iranian oil parcel for emergency reserves

India has received the first parcel of crude oil from Iran to partly fill the strategic storage in southern India as part of the Strategic Petroleum Reserves (SPRs) storage.

The first parcel of 2 million barrels of Iranian oil was imported by Mangalore Refinery and Petrochemicals Ltd (MRPL) with the help of very large crude carrier (VLCC) Dino.

India is planning to fill half of the storage with 6 million barrels of Iranian oil while continuing talks with United Arab Emirates and Saudi Arabia for the remainder. The second parcel of such reserve will be procured by Bharat Petroleum Corp.

Why it is important for India to have strategic storage?

  • India imports around 80% of its crude oil requirement from the international market. Most of these imports come from Middle East which is unstable region.
  • Any price aberrations in crude oil prices have a direct impact on the Indian economy especially upon the current account and inflation amounting to strategic risks.
  • Thus, it is necessary for India to have SPRs which will act as a valuable buffer against short term oil supply disruptions and global price shocks.

Government Proposals

  • Since 2003, the Central Government has commissioned the strategic oil reserves to maintain nation’s energy as well as economic security.
  • The erstwhile Planning Commission in its Integrated Energy Policy, 2006 also had recommended to maintain a reserve equivalent to 90 days of oil imports for strategic-cum-buffer stock purposes.
  • The recommendation was based on identification that any supply, market and technical risks in global supply chain of oil may become major threat to India’s energy security.

Present Status

India is building emergency SPR storages in vast underground caverns at three locations in southern India to store about 5.33 million tonnes of crude oil enough crude to cover almost two weeks of demand. They are located are in Visakhapatnam, Mangalore and Padur.


NALCO signs MoU with Iran to set up smelter plant in Chabahar

The National Aluminium Company Limited (NALCO) has signed a MoU with Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO).

The signing of the MoU coincided with the official two days state visit of Prime Minister Narendra Modi to Iran.

Key facts

  • The MoU was signed to explore the possibility of setting up smelter- cum-gas based power plant on joint venture in Iran for the proposed smelter plant in Chabahar Free Trade Zone.
  • For the proposed smelter plant NALCO will supply alumina from its refinery in India.
  • The MoU envisages tolling arrangement with existing smelters in Iran for producing aluminium and also proposes to look into other businesses.
  • It also envisages setting up of a joint taskforce comprising NALCO and IMIDRO experts to work out the details of the project.

NALCO is public sector enterprise of the Union Ministry of Mines incorporated 1981. It is Asia’s largest, and the sixth largest, integrated aluminium complex in the world. Its business encompasses alumina refining, bauxite mining, aluminium smelting and casting, power generation, rail and port operations.


India, Iran sign 12 bilateral agreements in various areas

India and Iran signed 12 Memorandum of Understandings (MoUs) and Agreements in various areas including building and operating the Chabahar port by India.

The other agreements include cooperation in science and technology, culture, library sciences, and cooperation between the EXIM banks of both the countries.

These agreements were signed after the delegation level talks between Prime Minister Narendra Modi and Iranian President Hassan Rouhani.

Some of signed Agreements are

  • Bilateral contract on Chabahar Port for port development and operations: It was signed between IPGPL (India Ports Global Private Limited) and Arya Banader of Iran.
  • It envisages development and operation of two terminals and 5 berths with cargo handling (general and multipurpose) capacities for 10 years.
  • MoU between EXIM Bank and Iran’s Ports and Maritime Organization (PMO): It is intended for the purpose of credit of USD 150 million for Chabahar port.
  • Confirmation Statement between EXIM Bank and Central Bank of Iran (CBI): It confirms availability of credit up to 3000 crore rupees for the import of steel rails and implementation of Chabahar port.
  • MoU between IRCON and CDTIC: It will enable IRCON to provide requisite services for the construction of Chabahar-Zahedan railway line. This line forms part of transit and transportation corridor in trilateral agreement between India, Iran and Afghanistan.
  • MoU on India-Iran Cultural Exchange Programme (CEP): It seeks to extend the CEP for the period 2016-2019. It covers areas of culture and art TV, radio, mass media and cinema.
  • MoU on Policy Dialogue between Governments and Interaction between Think Tanks: It seeks to create a Joint Secretary/Director General policy dialogue. It also seeks to encourage new institutional mechanisms between think tanks on both sides.
  • MoU between Foreign Service Institute, MEA and School of International Relations, Iran’s MoFA: It intends to enhance cooperation for training of diplomats and exchange of eminent speakers.
  • Implementation Protocol on Cooperation in the Fields of Science and Technology: It deals with cooperation in pursuant to the 2003 MoU and covers areas like exchange of experiences, seminars, conferences etc.

Besides, leaders of both countries also issued a joint statement mentioning that the Chabahar port is a symbol of synergy between both the nations. The port can serve as a point of connectivity to different countries and economic relations between India and Iran can further be expanded through the project. Highlighted the need of both the nations to work together to bring peace and stability in the region.