India invests in Iran using Rupees

The Iranian President’s visit to India was among the most important events of the week. India reversed a law which had previously only benefited investors in Bhutan and Nepal, allowing Indian investors to use rupees to finance Iranian projects. This decision was made in the hopes of solving some of the problems due to Iran’s banking sanctions. Iran-India relations have had numerous ups and down in the last few years. In 2010, trade between the two countries reached 14 billion dollars, the share of India being 13%. 11 billion dollars was due to oil exports from Iran to India and 1.8 billion dollars were from non-oil exports. However, due to banking sanctions, India has been unable to clear its debt and this has led to problems between the two nations. India cleared part of its debt by sending textile to Iran, yet a large portion of the debt remained. In 2015, India paid 6 billion dollars off its debt. Afterwards, negotiations began with the Indians in order to develop the Chabahar-Zahedan railway using 900 million dollars of Indian financing and with the new solution by the Indian government, the project will most likely pick up speed.