At NSA Talks, Iran Raises Rial-Rupee Trade, India Says Deal With Saudi Will Have 'Profound' Impact

Iran’s Secretary of the Supreme National Security Council Ali Shamkhani held talks with visiting National Security Advisor Ajit Doval in Tehran on May 1.

New Delhi: Iran on Monday, May 1, called for greater use of national currency in trade, even as India reportedly conveyed that the recent reconciliation between Tehran and Riyadh would have a “profound” impact in changing regional equations at the international level.

This was allegedly discussed during the delegation-level meeting of Iran’s Secretary of the Supreme National Security Council (SNSC) Ali Shamkhani with visiting National Security Advisor Ajit Doval in Tehran on Monday, Iranian state media IRNA reported. The Indian NSA also called on Iranian President Ebrahim Raisi and Foreign Minister Hossein Amirabdollahian. There is no public readout of the meetings from the Indian side. 

According to Indian government data, bilateral trade between India and Iran grew by 48% to reach $2.5 billion in 2022. This increase was largely due to an increase in Iranian petroleum exports to India. Western sanctions have largely impeded trade ties due to restrictions over financial transactions.

This year, bilateral trade dropped by 13% in the first two months. However, Iran’s exports grew by 91% to India in the two months compared to the same period in 2022.

The Iranian national security advisor told his Indian counterpart it would be helpful to activate the ‘rial-rupee’ mechanism, as per Tasnim news agency

“He emphasized that the launch of the financial transaction system using the currencies of Iran and India would be a major step towards the fulfilment of the common purposes in the economic field,” said the Iranian news agency report.

Doval also reportedly asserted that Chabahar port in Iran, which is being supported by Indian firms, is the “gateway” for increased cooperation between the two countries.

According to Irna and Tasnim, Doval “hailed” the recent agreement between Iran and Saudi Arabia that restored diplomatic relations. The agreement, brokered by China, marked the end of seven years of diplomatic estrangement. 

India’s public response to the deal had been a cautious statement that New Delhi had always favoured “dialogue and diplomacy”. Irna indicated that Doval was more expansive and noted that the Iran-Saudi agreement would have “profound regional effects on changing relations in the international system”.

The senior Indian official also spoke about the “deep influence” of Iranian culture in India as an indication of close ties between the two nations.

Not surprisingly, Afghanistan was on the agenda, with Doval batting for cooperation between Tehran and New Delhi to “boost stability” in Afghanistan. The Indian NSA also said, as per IRNA, that the two countries should work together to eradicate “Takfiri terrorism” in Afghanistan, a label used by Iran and the Taliban against Islamic State-Khorasan Province (IS-KP).

Iran has cultivated close ties with the Taliban, even before the insurgency had taken over Kabul in August 2021. While officially Tehran does not recognise the Taliban government, it allowed a Taliban-appointed official to take over the Afghan embassy to Iran.