JOIN USA new era in Iran’s relations with the world has begun. International sanctions on Iran have been lifted and the world is now free to invest, trade and engage with it, as can Iran with the international community. Iran has struggled for decades under the crippling impact of an array of sanctions imposed by the United Nations, the US and the European Union. Last week, the International Atomic Energy Agency certified that Iran had complied with the terms of the nuclear deal reached in July last year, paving the way for sanctions to be lifted. The lifting of sanctions will provide the Iranian economy with an immediate shot in the arm. Teheran will gain immediate access to over $30 billion of the total $100 billion in long-frozen assets abroad. It will be able to sell its oil and purchase commodities from the world market. Shortages in food, medicines and other essential commodities will ease. Iranian officials say they are in a position to release around 500,000 barrels of crude oil into the world market daily. While this will bring in much needed revenue to the country, other oil exporters are worried that Iran’s return to the world’s oil market will result in oversupply that would push down oil prices further.
Expectations are running high in Iran especially among its youth, who will be eyeing well-paying jobs and an improvement in lifestyles. Can President Hassan Rouhani meet these expectations? Iran’s oil infrastructure is outdated and badly needs investment. While companies are eyeing lucrative contracts in the oil industry, these may not materialise for some time. Much depends on political stability in Iran. The country will vote in parliamentary elections soon and should its powerful clerics and other hardliners do well, investors may have second thoughts about investing in Iran.
The India-Iran bilateral relations, which were severely restricted by the sanctions regime, are expected to bloom now. India’s import of Iranian oil is poised to increase as will its role in the exploration, production and refining of Iranian crude. The oil pipeline project as well as the development of the Chhabahar port, two major projects that were put on the backburner because of the sanctions, will gather momentum now. While Iran will welcome Indian expertise, investment and labour in the various sectors, India will need to improve its performance in meeting project deadlines; else Teheran will prefer to hand over new projects to more efficient competitors. India must pull up its socks to benefit from the immense opportunities that are opening up in Iran.