Iranian President Rouhani could give India key to port

Iranian President Hassan Rouhani's visit to India, which began on Thursday, could see the two sides seal details of the final take over of operations of the strategically important Chabahar port by India. Chabahar is turning out to be a success story in the India-Iran relationship. With the operationalisation of the port, it is witnessing high activity, and there are unconfirmed reports of traffic being diverted from Karachi to Chabahar.

Rouhani landed in Hyderabad on Thursday evening. He will be given a state reception and will meet PM Narendra Modi on Saturday. In an attempt to circumvent the banking problems caused by western sanctions on Iran, India will, for the first time, allow investment in rupees in Iran. This is a special arrangement, sources said, which is only allowed for Nepal and Bhutan.But international financial sanctions remain in place over Tehran, making it difficult for transactions or investment in international currency. "A rupeerial investment arrangement has been allowed by India," sources said. Rouhani was received at the Begumpet airport by governor of Telangana E S L Narasimhan and minister in waiting, R K Singh. Rouhani is expected to lead Friday prayers at the famous Mecca Masjid in Hyderabad on Friday, before heading to New Delhi.

This was a request from the Iranian side, acceded to by the Indian government, sources said. Rouhani is expected to meet the Shia community in Hyderabad and will meet the Parsi community in New Delhi, again a new element in an Iranian President's visit. Parsis fled persecution in Iran hundreds of years ago.

"Connectivity, energy trade and culture are the key pillars of President Rouhani's visit,"sources said. PM Modi and Rouhani have met twice -- once at Ufa and again in Tehran. However, energy relations remain the sticky bit. While Iran remains one of India's top suppliers of crude, the disappointment has been on the Farzad B field, where OVL discovered gas reserves almost a decade ago, but negotiations with Iran on the development of the field remain stuck.

The Farsi block, which includes the Farzad B field has an in-place gas reserve of 21.7 tcf, of which 12.5 tcf are recoverable. After Iran played difficult, India slashed oil imports from Iran in 2017. In an indication that Iran may be looking to arrive at some understanding on the issue, Rouhani will be accompanied by his oil minister Bijan Zangeneh during the visit.