‘Two state-owned insurers ready to cover Iran oil imports’

Solution to land boundary dispute with Bangladesh in sight; constitutional amendment Bill for it may be moved once Parliament session resumes

India may be close to finding a solution to the vexed issue of insuring oil imports from Iran, after major West-based insurers pulled the plug due to US-led sanctions barring companies from interacting with Iran. “One or two (state-owned) insurers are ready to step in,” said senior government sources in the know.

GIC Re may be the only domestic firm equipped to take over the reinsurance business, though this could not be verified independently.

Oil is India’s biggest import and any disruption or price volatility has a direct bearing on the country’s already perilous current account deficit, pegged at five per cent of gross domestic product for 2012-13. Currently, Iran accounts for 12 per cent of India’s crude imports.

“These days, one of the pillars of our foreign policy is ensuring energy security. Of late, oil imports from Iraq have grown significantly in our oil basket,” said a government official.

On the prime minister’s visit to Germany, the source said India felt Germany was a critical source of industrial technology, apart from being one of the major potential investors in key infrastructure projects such as the Delhi-Mumbai industrial corridor, the green energy corridor in Rajasthan and Ladakh in Jammu & Kashmir. Germany has evinced interest in extending a ^1-billion credit line to the green corridor project. “This may just be the beginning of its interest in this $6-billion project,” said another senior government official.

Though India is hopeful of Pakistan delivering on the promised most favoured nation status to India, elections in that country in May might lead to delay in the process.

The official quoted first added India believed “we have a solution to the ground boundary issue with Bangladesh”. India, which is watching the internal turmoil in Bangladesh closely, feels that country has the “solid political heritage” to deal with dissenting and often acrimonious internal opinions.

The India Bangladesh Land Border Agreement, the protocol for which was signed by Prime Minster Manmohan Singh during his visit to Dhaka in September 2011, would settle the long festering issue on clearly demarcating land boundaries between the two countries. There are 51 Indian enclaves in Bangladesh and 111 Bangladeshi enclaves in India. A solution to the boundary issue with Bangladesh is significant and, according to a third source, a constitutional amendment Bill for this may be moved in the current session Parliament, when it resumes on April 22.

Expressing confidence at India’s growing geo-political heft, the official said now, “we’re in a position to help direct outcomes” on a number of sticky global issues. “Germany is the lead country for police reforms in Afghanistan, and we will be discussing this issue with them in our bilaterals,” said the first official quoted.

By Business Standard

 

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