Why now is a good time for India to do business with Iran

I spent almost a week in Iran about a fortnight ago, with a friend from London. US President Barack Obama was on TV saying that the USA would walk away from the serious negotiations that the P5+1 countries were having with Iran. As a result of the effects of sanctions , Tehran possibly has one five star hotel, so we couldn’t help bumping into the IAEA delegation at breakfast every morning, including Yukiyo Amano the IAEA head, who had flown in especially to meet the president. There was palpable tension in the air. This is also the holy month of Ramzan, and everyone was fasting, which adds to the fatigue in the intense heat.

With skewed perceptions about Iran and the treatment we would receive as Westerners, we set off via Dubai on an Emirates flight. We landed with a sense of trepidation, expecting to be delayed at immigration and customs, in a country out of touch with the world. Much to our surprise we were received as we walked of the plane (as our hosts had booked us something called a CIP service-Commercially Important Persons) led to a beautiful terminal where our immigration stamps and luggage were dealt with in a matter of minutes and were on our way in a new Korean-made private taxi to our hotel.

Iran has been in political isolation for more than 40 years and the signs of the economic strain this has put on the country were visible as we drove from the airport to the Hotel. The country has gone through high periods of inflation and currency devaluation. Unemployment is high. A resultant lower GDP growth rate over the last ten years has had a noticeable knock-on impact on investment on infrastructure. The Iranian rial is not convertible or tradeable. As a result business is in cash, thereby making growth virtually impossible. The buildings were old and run down. One exception, the roads and highways are beautifully constructed and Iranians have a great sense of pride in these. Iran has a population of about 79 million people of which over 50 per cent are aged young aged between 15 and 44. Iran is a culturally diverse country and apart from Persian the languages spoken are Azeri, Kurdish, Semnanin, Gilaki, Mazandarani, Turkmen, Arabic, Baloch, Georgian, Armenian, and Neo-Aramaic.  Iran has the world's third largest oil reserves and the world’s largest reserves of gas. Iran also has potentially huge reserves of coal, chromium, zinc, lead managanese, Sulphur and iron ore. It also produces diverse and exotic fruits such as pistachios, berries, saffron, caviar, dates, apricots watermelons figs. Fine Persian carpets are well known. Iran as a result of its ancient history and culture has lots to offer as a tourist destination as well.

We talked to many people during our trip. One an entrepreneur educated in the West, who had come back to set up an Iranian fund that was investing in Iranian e-commerce start-ups. He took us to a very fancy Iranian restaurant, where he said he entertained all his overseas visitors and as the conversation developed I realized that he was also making a fortune in redeveloping property in Tehran. We met several Government officials educated in India or in the West, who were polite and kept to the allotted time and appointments. They told us that Iran had had learnt to become self-sufficient during the sanctions, known as "resistance economy". Which was diverting its own output to the domestic market and producing many previously imported goods domestically. The food we consumed for instance at breakfast or lunch was processed and packaged locally.

Iran has an impressive network of local airlines and domestic flights, however its airlines, we had heard have the worst safety records as they have been plagued by crashes. Sanctions have blocked the airlines from replacing their ageing fleets. We flew to Khuzestan in Southern Iran, quite close to Iraq’s border, with our charming Iranian friend who wanted to show us a bit of the country. He had travelled to more than 60 countries, representing the Government and was now a consultant, based in Vienna and spoke fluent English and German. The thought of being on an internal Iranian flight, knowing what we did, was very stressful. The airport however was a sea of calm, despite being packed with passengers and helped reassure us. Passengers at the terminal or in the aircraft talking to each other very softly. Was this fear or culture?  We figured it was the latter. At the airport I noticed advertisements of Prada and Gucci. Although large parts of Khuzestan was devastated by the twelve year war with Iraq, and cities were destroyed, and historical sites were demolished, the people had not lost their good manners. Iranians when they discovered that I was from India would politely say they had either studied in India or loved yoga or were vegetarian. There seemed to be a certain respect for ideas Indian, but they knew little else about India, except that we exported sub-standard rice. Rice forms an important part of Iranian food. Our Iranian friend, introduced us to a burqa clad Arab woman, it turned out she was a former mayor of the town.Although our meeting was brief she would not leave until we accepted her gift of dates and local sweets, during Ramzan. Charming.

The art scene in Iran was also alive and well. We visited some galleries and met the owners. Mostly young women who had come back to Iran after having spent much of their lives in London or New York. A large market with a young demographic seems to exist and is optimistic about its future. They displayed capitalist and consumer behaviours which we noticed in one of Tehran’s small malls. As we boarded our flight back to Dubai we realised  that Iran appears to be ready to embrace a capitalist, more consumer driven society.

On July 14, the sanctions were lifted in Iran. Iranian President Rouhani said that the prayers of the Iranian people were answered over Ramzan. He also said that the nuclear deal comes with a huge responsibility. Obama said that it was a comprehensive long term deal that will prevent Iran from obtaining a nuclear weapon. There are sceptics too of the deal. Only time will tell.  The deal will allow Iran to make banking facilities to buy desperately needed goods and services. It will also throw open huge opportunities in industries such as oil and gas, mining, automotive, pharmaceuticals, food, logistics, civil aviation, precious metals for India long considered a historic partner of Iran. With increased relations with Iran, hopefully India, will also be able to exert some influence on Iran to strive for peace and prosperity in the Middle East.