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US sanctions against SWIFT transfers to Iran might impact India: FIEO

The Society for Worldwide Interbank Financial Telecommunication is used for interbank messages to conduct financial transactions safely, when banks from two or more countries are involved.

Published: 10th May 2018 05:25 AM  |   Last Updated: 10th May 2018 05:25 AM   |  A+A-

Iran

Image used for representational purpose only.

Express News Service

CHENNAI: Even as India’s Rupee-Rial establishment with Iran might dispel initial fears of a huge trade impact in case of probable sanctions by the United States, sanctions against SWIFT transfers to Iran might discourage many Central Asian countries from investing on Indian exports through the Chabahar port.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is used for interbank messages to conduct financial transactions safely, when banks from two or more countries are involved.

“The impact depends on what kind of sanctions the US decides to impose on Iran. If the US disrupts SWIFT, then it will have a huge implication — transactions in foreign exchange might not be possible,” said Ajay Sahai Director General & CEO — The Federation of Indian Export Organisations. “If a sanction against SWIFT is imposed, the movement of cargo through the International North-South Transport Corridor will be difficult because even if you are exporting to Russia or any country in Central Asia, banks will be reluctant to take the goods as they will be transiting through Iran,” Sahai added.

India has invested heavily into Chabahar port in Iran, which India plans to use as a major trade route to Afghanisthan, Central parts of Asia and Eurasia, bypassing another major trade route through Pakistan.
“In case sanctions are imposed on Iran, I think it would be difficult to even attract investment through the Chabahar trade route, because you require investment in hard currency. But I think it is too early to conclude, let us see what kind of sanctions are imposed on Iran,” he added.



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  • P.S.CHANDHOK

    As long others stay in the Iran deal JCPOA P5+1,it would be premature to speculate on the outcome of sanctions.India and Iran have the best model of bilateral business it cannot be effected in any manner and they can create alternate mechanism for bilateral payments.India's national interests and Energy needs are equally important.I believe we would see India taking a leading role to mediate between all the parties for solutions, as every one had enough of worries and speculations.The need of the hours is solutions which are always welcome.
    2 years ago reply
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