Reuters reported that India's largest
ever steel export deal, struck with Iran in 2014 to allow it to buy steel
without violating Western sanctions that are now set to end, has become mired
in a dispute that has seen no payments made or shipments delivered since last
fall. The impasse underlines how Iran is taking a more assertive posture in its
dealings with trading partners as options open up for business and it looks to
strike better deals.
The steel deal ran into trouble in September, when Tehran failed to clear dues
of about 4.5 billion rupees ($66.73 million) for steel exported to it by STC.
STC was supposed to supply 1 million tonnes of steel in the first year of the
contract, which is for a total of 2.5 million tonnes of steel plate and coil
over the three-year span. By September of last year, however, STC had supplied
only about 450,000 tonnes of steel.
The source said STC supplied the steel to Iran based on availability and demand
from Tehran, which was why the shipments were far below the expected levels.
The complex arrangement was put in place to allow steel exports without
violating sanctions that prevented private Indian companies from dealing
directly with Iran. That is set to change, with Western sanctions expected to
be lifted under a historic nuclear deal struck in July between Tehran, the
United States, Britain, France, Germany, Russia and China, giving Iran far more
flexibility to pursue deals.
As per report, Iranian Gas Engineering & Development Company has written to
Indian state trader STC India Ltd complaining that steel shipments have been
irregular and far below terms set out in the USD 2.5 billion contract. It also
said in the letter that it would like to deal directly with Essar Steel India
Ltd, which was supplying the steel to STC for export, if the state trader did
not restart regular shipments soon. It wrote “We strongly urge STC to either be
more flexible to enable regular and faster shipments or allow the contract to
be dealt directly between IGEDC and the manufacturer.”
Source: Reuters