PRESS BRIEFING BY INDIAN FOREIGN MINISTRY
SPOKESPERSON ON VISIT BY IRANIAN FOREIGN MINISTER
KAMAL KHARRAZI

INDIAN MINISTRY OF EXTERNAL AFFAIRS

February 21, 2005

Official Spokesperson: Good evening. H.E. Mr. Kamal Kharrazi, Foreign Minister of Iran is here for the 14th meeting of the India-Iran Joint Commission. He has had the first round of the Joint Commission Meeting with External Affairs Minister Shri Natwar Singh and the Indian delegation. There will be another round and the signing of the minutes of the Joint Commission Meeting tomorrow at 10:30 am. He has also had a restricted session of discussions with the External Affairs Minister and aides, which lasted about 55 minutes to an hour, followed by about a 15-20 minutes one-on-one session between the two Ministers.

To give you a flavor of some of the issues that were discussed. There was overall review of the bilateral relations with the focus being on economic and commercial cooperation. Foreign Minister of Iran welcomed the recent Cabinet decision on the gas pipeline and this will be taken forward in the technical level discussions by the petroleum ministries on both sides.

The trade situation between the two countries was reviewed. Bilateral trade figures are now about 3 billion dollars annually. While this has traditionally been predominated by the hydrocarbon sector, there has been, and this is a matter of satisfaction, in recent years a significant increase in its diversification to other sectors. In particular, sectors like cement and aluminum have shown some success in the form of joint ventures etc because aluminum is greatly needed in Iran and we can help there. LNG is another area on which an agreement was recently reached and which has been appreciated by the Iranians.

Some amount of trade and economic cooperation exists in other sectors too and there was a desire to move much further in areas such as pharmaceuticals, textiles, automobiles, telecommunications and IT. On IT, the Iranian side requested that we should have a separate sub-committee in the Joint Commission. External Affairs Minister gave his agreement that we would have a separate sub-committee on IT. This would be formalized tomorrow.

Steel is another area in which there has been progress. The Indian business groups like Essar and Tata have moved well ahead in their discussions with Iran in setting up mega steel plants in the Economic Zone in Bandar Abbas. This will obviously open the way for other companies also to move into these areas.

All this economic and trade activity requires that we have a separate juridical basis. That was also discussed today. Bilateral Investment Protection Agreement between the two countries and Double Taxation Avoidance Agreement need to be finalized. The importance of these agreements was emphasized today so that these can encourage a greater flow of capital and technology between the two countries and give greater confidence to the investors.

I may mention that Dr. Kharrazi on more than one occasion mentioned that they looked forward to India becoming a major investor in Iran. The services sector was also discussed. In particular, areas like railways and paper and pulp, small enterprises came up. In railways we have had a tradition of cooperation and RITES and IRCON have been active in Iran. This was again brought up. There are possibilities of huge projects working out there and this meshes in with Iran's own desire to seek cooperation to build up a network of roads and rails, which will work into the North-South corridor and transit into Central Asia and beyond.

Besides IT, knowledge-based Indian industries like biotechnology and other scientific areas were offered to Iran and we also offered that we could undertake high visibility projects like development of IT Parks in Iran.

Of course cultural cooperation, without which no discussion between India and Iran can really be complete, also came up for discussion. In this context External Affairs Minister quoted from Pandit Jawaharlal Nehru's letter to his daughter Indira written in 1933 in which he said that Iran is "the country whose soul is said to have come to India and found a worthy body here in the Taj".

EAM in the restricted meeting briefed Dr. Kharrazi on his recent visits to Kabul and Islamabad and on the progress that has been made in discussions with Pakistan. He also briefed him on developments in Nepal. Dr. Kharrazi, on his side, briefed EAM on Iraq and also on their ongoing discussion on nuclear issues with the EU-3 and with the IAEA. He reiterated the invitation for Prime minister to visit Iran.

Question: You referred to Mr. Kharrazi welcoming the Cabinet decision on pipeline. Could you elaborate on that and what did he tell EAM on the nuclear issue?

Answer: On the pipeline Dr. Kharrazi essentially, as I said, expressed their pleasure with the Cabinet decision to go ahead with the discussions on a pipeline from Iran across Pakistan and he said that there are ongoing talks with the technical team from Iran here at the moment. An Indian technical team from the Petroleum Ministry, I understand, is due to visit Iran perhaps towards the end of the month. This is all that was discussed on the pipeline.

On nuclear issues, he briefed EAM on Iran's position. He said that they are in discussions in Vienna. They need cooperation and understanding. They are in continuing discussions with EU-3 and are also working closely with the IAEA. Naturally, the Indian position in all this is important and he talked also of the need of Iran to have access to nuclear technology for civilian purposes.

Question: This is specific with regards to India…

Answer: No, in general because that is their position, that they need access to nuclear energy for civilian purposes.

Question: What is India's position?

Answer: We have always taken a position that they have to work with the IAEA on this matter.

Question: Can you tell us what Dr. Kharrazi said on the Iraq issue?

Answer: On Iraq he expressed satisfaction that elections have been held and that the ministries now would start their work. He talked of the possibilities of Iran working in Iraq ultimately in terms of training; in reconstruction and rehabilitation projects and that we have to get ready to take up work in these areas.

Question: What did EAM say?

Answer: EAM said that we are also looking at Iraq. He explained our position on the elections and said that India has already expressed its readiness to work in rehabilitation and reconstruction projects once a certain amount of security and law and order is established.

Question: Was the Petroleum Minister part of these discussions? Answer: No, this was not a discussion on the pipeline. This was the 14th Meeting of the Joint Commission, which has certain areas, which already exist. There is commerce, there is railways, there is agriculture, etc. The representatives from these Ministries were present. Petroleum in this Joint Commission forms a part of trade because hydrocarbon trade has been the major part of India - Iran trade so far. But on the discussions on the pipeline things are being technically carried forward by the Petroleum Ministry.

Question: Did he meet PM today?

Answer: He is meeting Prime Minister at 6 pm.

Thank You.