Published On:October 14 2014
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Indian government plans for first reverse SEZ in Iran.
The first reverse SEZ (special economic zone) project, a concept through which Indian chemical and petrochemical companies will be encouraged to set up plants in other countries to manufacture basic raw materials, is likely to come up in Iran. This was stated by Ananth Kumar, Union Minister for Chemicals and Fertilisers, yesterday during the inauguration of India Chem 2014.
Ananth Kumar added that the talks are in initial stages. The ministry has prepared a white paper for the reverse SEZ and is also involving Finance Minister and External Affairs Minister in this process.
According to government sources, when the concept of reverse SEZ was first floated, Iran, Myanmar and Mozambique were front runners as these countries have abundance of oil and gas resources, a key feedstock for petrochemicals and petroleum industry. Now, ministry believes that Iran could be an ideal place to start reverse SEZ project since many refineries in India already import crude from Iran and have working business relationship with Iranian companies.
Ananth Kumar said through reverse SEZ Indian companies can have excess to low-cost feedstock to make petrochemicals, which than can be imported into India for downstream industries right from textiles, plastics, paints, dyes, pharmaceuticals, etc.
In addition, the minister said that India is also holding talks with Iran for setting fertiliser plant in that country – similar to the one already existing in Oman. Stating that the exact investment scale is not yet finalised, Ananth Kumar informed that for setting up a 1.2-million tonne urea plant on an average Rs. 5000-6000 crore is required.
In Oman, Indian Farmers Fertiliser Cooperative Limited (IFFCO) and Krishak Bharati Cooperative Limited (KRIBHCO), along with Oman Oil Company SAOC (OOC) have established Oman India Fertiliser Company SAOC (OMIFCO) for urea project. Indian Government believes that the urea off take agreement with OMIFCO will provide the country with a reliable and long term source of urea.
According to Ghomalreza Ansari, Iranian Ambassador to India, Iran offers unique investment opportunities to Indian companies as it has abundance of energy resources and is also closer to India. He said that chemical companies can look at Iran as a reliable supplier of raw materials to meet the needs of downstream industry and a dependable partner for ‘Make in India’ campaign, which was announced by the Indian government recently.