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Rupee pact with Iran
Why is it in news?
- Recently, India-Iran concluded rupee payment mechanism which will give opportunity to the Indian pharma industries to increase exports to Iran.
More in news
- How agreement works?(1) Under the agreement, Indian refiners make payments in rupee for oil imports from Iran, to designated accounts maintained with UCO Bank.(2) A portion thus received is to be used by Iran to pay for imports from India, including pharmaceuticals.(3) Indian pharma exports to Iran were at $124.05 million in 2018.
- Status of Iranian pharma industry:(1) Iran has a well-established pharma industry that meets 80% of the country’s requirement.(2) The remaining 20% is met predominantly through imports from Europe.
- Declining Indian pharma exports to Iran:(1) Constituting mostly APIs (bulk drugs), Indian pharma exports to Iran have been declining in recent years.(2) From $180.50 million in 2015-16, pharma exports to Iran fell to $160.33 million in 2016-17.
- Opportunity to Indian pharmaceuticals: With a cloud of uncertainty over continued pharmaceutical supplies from Europe in the wake of the U.S. sanctions against Iran, the Indian pharma industry could explore opportunities to step up exports.
Source
The Hindu