PM in Iran to boost strategic relations

Prime Minister Narendra Modi on Sunday arrived in Iran to advance India’s strategic partnership, especially the Chabahar port that would provide an easy access to central Asia, skirting Pakistan.

Modi began his two-day visit paying obeisance to Tehran’s only functioning gurudwara. The visit, which will see India and the Persian Gulf nation working on enhancing economic partnership, includes a possible deal on developing Phase-1 of the port.

Chabahar port is strategically vital for India. It would serve as a critical access-point to the land-locked Afghanistan, bypassing Pakistan that showed reluctance to provide overland transit permission to Indian goods passing through its territory.

“I look forward to the conclusion of the Chabahar agreement during my visit. Enhancing the connectivity, trade, investments, energy partnership, culture and people to people contacts would be our priority,” Modi tweeted before his departure.

“Reached Iran, a land with whom India shares civilisational ties. Hope to enhance economic partnership between our nations. I also hope my Iran visit further cements cultural and people-to-people ties between India and Iran,” he tweeted later.

The first Indian prime minister to visit the Islamic nation in the last 15 years, Modi was received at the Mehrabad International Airport here by Iran’s Finance and Economic Affairs Minister Ali Tayyebnia, after which he left for the local Gurudwara.

The Governor said India is fairly safe from volatile global economy and it has posted 7.5 % growth despite two droughts and weak international market.

While there is a need to ensure macro-level stabilisation, the country would have to keep inflation under control and cleanse the banks, he said. “This can strengthen macro-level stability,” he said.

In addition to that, maintaining reforms would attract both international and domestic investors and spur activities, Rajan said.

Stating that structural reforms are important for elevating the potential of economy, the RBI Governor said degree of competition and level of participation of different segments of society should be raised in order to bring more and more people into the workforce.

However, it may be difficult politically to speed up structural reforms and while labour market reforms can boost growth, the process may draw opposition, he said.
Describing a good policy as the first line of defence for the economy, he said in order to ensure safe borrowings, the country should try to opt for long-term borrowings instead of short-term ones.

On the need for intervention in the realm of exchange rate to reduce volatility, Rajan said the country’s foreign exchange reserve has gone up to USD 360 billion.