India Well Positioned to Gain from Iran Nuclear Deal

As the world readies to do business with an Iran free of sanctions, one country in particular is watching closely: India.

As a major net importer of oil, India has already benefited from the U.S.-led nuclear deal with Tehran. Oil prices have declined in recent days, driven largely by expectations of more Iranian crude hitting the market. According to India’s Finance Ministry, power-hungry India saves nearly $1 billion in import costs for every dollar drop in global crude prices.

India is particularly well positioned to benefit because many of its refineries are designed to receive Iranian-grade crude, analysts said. On Wednesday, after the agreement was signed, Mumbai’s Sensex closed up 1% on hopes of cheaper fuel. Shares in the Indian Oil Corporation Limited are up 5% since Tuesday.

But it’s not all good news.

Since India refused to fully take part in the U.S. and EU-led sanctions on Tehran, Indian businesses have made substantial inroads in Iran, and the sanctioned country is now India’s third-largest trading partner. Exports to Iran nearly doubled to $3.3 billion between 2009 and 2013, according to India’s Ministry of Commerce.

Now, Indian businesses will begin to face stiff global competition.

“The sanctions provided us market access in Iran. However, we have to be in the market based on quality and competitiveness,” said S. C. Ralhan, president of the Federation of Indian Export Organizations.

via CNN

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza