India may invest Rs 1 trillion on Iran urea plant, other projects

In a major move aimed at giving a boost to gas-based urea manufacturing units, the Centre has urged Iran to lower down the offered price to $1.50 from 2.95. Informing about this development, Road Transport, Highways and Shipping Minister Nitin Gadkari on Wednesday said that Iran has offered to supply natural gas at $2.95 for a urea plant that India will set up at Chabahar port on the Persian Gulf, but New Delhi wants rates to be lowered.

The Centre is mulling an investment of worth Rs 1 lakh crore in Iran to set to different gas-based manufacturing units. The strategic talks are in process and India has already pledged to invest about $85 million in developing the strategic port off Iran’s <g data-gr-id="48">south eastern</g> coast, which would provide India a sea-land access route to Afghanistan by passing Pakistan.

“India is ready to make huge investments in Iran. If urea plant is set up, it will result in slashing of urea prices in India by 50 <g data-gr-id="45">per cent</g> and cut on huge subsidy on urea, which is Rs 80,000 crore,” the 

minister added.

In reply to a question about the development of the port, Gadkari said, “Various ministries will give their report by September 28, based on which a final decision will be taken. India is ready to invest more than Rs 1 lakh crore, but that depends on negotiations with Iran.”

On talks on <g data-gr-id="49">supply</g> of natural gas, Gadkari said, “Iran is offering gas to India at $2.95 per million British thermal unit to set up urea plant at the Chabahar port in Iran. India is negotiating the gas price and has demanded it at $1.5 per mmBtu rate.”

The rate offered by Iran is less than half the rate at which India currently imports natural gas from the spot or current market. Long-term supplies from Qatar cost <g data-gr-id="37">four-times</g> the Iranian price.

India, which imports around 8-9 million tonnes of the nitrogenous fertiliser, is negotiating for a price of $1.5 per mmBtu with the Persian Gulf nation in a move which if successful will see a significant decline in the country’s Rs 80,000 crore subsidy for the soil nutrient.

According to Gadkari, Ministries of Chemical & Fertiliser and Petroleum are working on the proposed 1.3 million tonnes per annum plant, which once successful will <g data-gr-id="43">led</g> to urea prices coming down by 50 per cent.

Gadkari had visited Tehran in May, and both the nations had inked a pact to develop the Chabahar port. Iran’s Foreign Minister Mohammad Javad Zarif had also called on Gadkari last month.  In August, Gadkari had said Iran has given “very good offers” to India to develop the integrated Chabahar port, which has a special economic zone (SEZ).

<g data-gr-id="46">Replying</g> on <g data-gr-id="53">performance</g> of Major Ports, the minister said, “The decline observed in the performance of Major Ports from 2008 to 2014 has reversed and they have shown improvement in their performance in 2015. The profit margins of Major Ports declined from 43 per cent to 28 per cent during 2008 to 2014 and the market share of ports during the period declined from 72 per cent to 57 per cent,” adding that from next year, the shipping ministry will contribute 1 <g data-gr-id="47">per cent</g> in GDP.