The Union Cabinet chaired by the Prime Minister Narendra Modi on 6 April 2016 gave approval for increasing the framework agreement between Exim Bank of India and a consortium of Iranian banks lead by Central Bank of Iran.
It would help in financing the purchase of goods and services from India to 3000 crore rupees from 900 crore rupees.
This will be done by utilising the Export Development Fund (EDF). The proposal provides for domiciling two contracts of export of steel rails by STC and for the Chabahar Port Development project previously approved by the Cabinet under EDF.
The proposal will promote the country's exports with Iran. It will also deepen India's relationship with Iran as a strategic partner.
• The Exim Bank of India and seven Iranian Banks led by Central Bank of Iran had negotiated a framework agreement in November 2014 for financing the purchase of goods and services from India by Iranian entities to the tune of 900 crore rupees under EDF.
• The increase to 3000 crore rupees will enable the Exim bank to provide Buyer's credit facility to Iran, secured via sovereign guarantee from Iran, for the export of goods and services.
• This will provide opportunity to Indian Companies to penetrate and enhance their footprint in Iran along with facilitating the growing trade and investment with Iran.
• This will also help in employment generation and development of ancillary activities in India.
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Who: Union Cabinet
When: 6 April 2016