Just a week after Prime Minister Narendra Modi’s visit to Saudi Arabia, India has offered to invest around USD 20 billion in Iran.

Indian Petroleum Minister Dharmendra Pradhan, who concluded his two-day visit to the West Asian country on Monday, said that the Modi government was ready to invest in Iranian petrochemicals, fertiliser and Liquefied Natural Gas (LNG) facilities. He also said that Iran, in return, agreed to allocate lands to India for setting up fertiliser plants and to supply gas at cheap rate.

Speaking at a press conference in Tehran after holding talks with his Iranian counterpart Bijan Namdar Zangeneh on Sunday, Pradhan said that the two “friendly” nations decided to bolster energy co-operation in the coming days. The visiting Indian minister thanked Zangeneh for his assurance that Iran would help the South Asian nation meet its growing need for crude oil and other petroleum products.

Meanwhile, the Indian Petroleum Ministry said in a statement: “Pradhan conveyed to the Iranian side that Indian companies could invest up to USD 20 billion and were interested in setting up petrochemical and fertiliser plants, including in the Chabahar Special Economic Zone (SEZ), either through joint venture between Indian and Iranian public sector companies or with private sector partners.”

According to the statement, the visiting minister and Zangeneh discussed different aspects of bilateral energy ties. The Iranian minister further assured Pradhan that India would get appropriate and adequate land in the SEZ for setting up fertiliser plants. In the presence of his Indian guest, Zangeneh told the media that Tehran would supply rich gas and LPG to New Delhi at a competitive price on a long-term basis. He welcomed India’s decision to set up an LNG plant and a gas cracker in the Chabahar port, saying that President Hassan Rouhani was keen to allow India to develop Farzad-B gas fields.

However, Iran, which stopped selling oil to India for rupees, demanded payment in euros only. During his meeting with Pradhan, Zangeneh said: “From now on, Iran will trade oil only in euros.” As expected, India agreed to pay in euro currency, as it wanted to finalise the deal with Iran.

Since lifting of sanctions (imposed on Iran by the US and Western countries over its nuclear programme) on January 16, New Delhi and Tehran has been trying hard to boost their energy ties. While Iran wants India to increase its crude import from the West Asian nation and take it to the level of pre-sanction years, India wants lucrative purchase terms to continue. “We hope that India’s imports of oil from Iran will increase now that the sanctions have been removed,” stressed the Iranian petroleum minister.

Koushik Das, based in the Indian capital of New Delhi, is a senior news editor with more than 15 years of experience. He also runs a blog - Boundless Ocean of Politics. E-Mail: [email protected]