India and Iran have had friendly relations that date back thousands of years. This legacy is evident in the interaction between the two nations in cultural, economic and political fields. Iran's economy has improved in recent years; it is now the fifth-largest cement producer in the world with resources in energy, oil, gas, chemical, minerals and agriculture, and is executing important construction projects overseas. Considering that India is the world's second-largest cement producer and poised to become the world’s third-largest construction market, there is significant potential for collaboration between the two countries that remains untapped, especially in areas like construction of large projects, mass housing, solar, wind energy and energy storage solutions. In conversation with Group Managing Editor FALGUNI PADODE and R SRINIVASAN, Dr Davoud Rezaei Eskandari, Acting Consul General, Iran, expresses the hope that this will soon change in view of recent developments. Excerpts: The size of Iran’s construction market size is projected to achieve an average annual growth rate (AAGR) of over 3 per cent during 2024-2027. Please tell us more about the projects you have undertaken. In which construction segments are your contractors most active? Based on a recent IMF and World Bank report, Iran's economy is improving. According to the report, Iran's economic growth was 5 per cent in 2023 and 3.2 per cent in 2024. This growth rate is estimated to continue in upcoming years, as well. Right now, we have a dynamic and diversified economy of almost half-a-trillion dollars. Many important construction projects have been conducted or are under construction by Iranian companies in the country and abroad in West Asia, Central Asia, Latin America and Africa in the fields of energy, power and industry. For example, over $ 5 billion worth of projects have been undertaken in Iraq and Syria each. Iran has constructed the strategic Anzob or Istiqlol tunnel in Tajikistan. Built completely by Iranian company Sabir International, it has become the central core of Tajikistan's main transport axis between the capital Dushanbe in the south and the second largest city, Khujand, in the north. The tunnel has reduced the distance and transit time between these two cities significantly. Further, Iranian engineering companies have constructed the Sangtodeh 2 dam and hydropower plant with a capacity of 220 MW and an annual energy production of 1,008 GW hours. In addition, hundreds of Iranian engineers are building the Raghun dam and power plant with a height of 335 m. The tallest dam in the world, it has six power plant units with a capacity of 600 MW each. In Afghanistan, too, hundreds of projects are under construction by Iranian companies in the rail, road, mineral and industrial sectors. Coming to other countries, the Uma Oya Hydropower Complex in Sri Lanka, valued at over $ 500 million, was executed by Iran's Farab engineering group and officially inaugurated by President of Iran Dr Ebrahim Raisi and President of Sri Lanka Ranil Wickremasinghe on 24 April 2024. The power plant produces 120 mw of electricity to the national grid and irrigates 11,100 acre of new land and 3,700 acre of existing agricultural land. Iranian companies have also been active in Latin America. For instance, in Venezuela, they have signed contracts related to the reconstruction and renovation of oil terminals, petrochemical facilities, and the installation of gas pressure boosting stations. Additionally, Iran has established 18 dairy factories in the region. Further, the construction of 10,000 residential housing units is being carried out by Iranian company Kayson Inc, utilising a reinforced concrete house building system known for its high quality and cost-effectiveness. In Africa, the Iranian Mahab Ghodss Company, in a consortium with Russian and Tanzanian companies, in competition with companies from 32 countries, won the tender for the design and construction of Rufiji dam and power plant, the largest hydroelectric power plant in Tanzania. This highlights the technical and engineering capabilities of Iranian companies, emphasising the significant potential for collaboration between the private sectors of Iran and India. This cooperation could extend to either our respective countries or even third-party nations. In your view, what avenues for collaboration could be explored between Iran and India? Considering the potential of Iran and India, we believe that the volume of trade between our two countries is much less than it could be. Our total economic cooperation with India is around $ 5 billion while non-oil trade with China is over $ 34 billion, trade with UAE is worth around $ 27 billion, Turkiye $ 12 billion and Iraq $ 10 billion. On the one hand, you have Iran, which is a growing economy with 89 million population, half-a-trillion-dollar economy and incredible resources; on the other, you have India, the fifth-largest world economy, soon to be the third, with $ 3.7 trillion GDP. There is immense potential in different sectors that could be of mutual interest. Iran has a wishlist for this. As a huge economy, India will need more energy to grow – oil, gas or petrochemical, raw materials and minerals that Iran has in abundance. (Iran is among the biggest holders of oil and gas resources globally; the annual production capacity of the country’s petrochemical sector exceeds 100 million tonne and we have 15,000 mining areas, of which some 6,200 are active.) India is importing agricultural products from Iran and we are also importing some from India. But the potential is much more than just importing and exporting fruits. Iran has over 350 pharmaceutical enterprises and there is potential for more meaningful cooperation. We also have some strategic projects in real estate, road construction, etc, that could be of interest to India. The Makran region in southeastern Iran is set to become Iran's third petrochem hub. A petrochemical town with projects worth billions of dollars is under construction in this area. Dozens of big projects, such as an international airport, stadium, housing, desalination plant, etc, are on the agenda. Further, India and Iran recently signed a 10-year contract for operating the Shahid Beheshti port in Chabahar. The Indian Government is going to invest $ 120 million just to equip the port. Other than that, India has offered a $ 250 million credit line to finance projects in this area. What are the potential hurdles to greater collaboration? One of the challenges we face in India is that the image of Iran is not equivalent to that of a growing economy with huge potential for our bilateral relationship. We have a dynamic economy, export 3 million barrels of oil per day, and billions of dollars of petrochemical and mineral items. Our trade turnover is over $ 160 billion. Normally, you don’t see this well illustrated in the media. This is something we should work upon to inform readers and interested companies. What message would you like to convey to Indian contractors? There is more potential in Iran for Indian private-sector companies than they can even imagine. Indian companies and contractors should participate in some of our exhibitions and talk to Iranian companies. We are doing our best to expand people-to-people contact between Indians and Iranians. As of February 2024, we have waived Iranian visas for Indians. All Indian nationals can travel to Iran as tourists for two weeks, every six months, without any need for a visa. There is a direct flight from Mumbai to Tehran weekly, every Friday, and also two weekly flights from Delhi. Participate in some of these exhibitions and visit a potential client. I guarantee that if they go once, it will not be the last time and they will start some business with them. We have a project to make 1 million houses every year. Companies from many foreign countries are already listed to enter the market. Indian companies can participate as well. We have around 15,000 km of national railroads, 20,000 km of expressways, almost 3,000 km of freeways and more than 10,000 km of freeways under construction right now. There is huge potential in the metro sector too. The Tehran Metro is the largest metro system in the Middle East with 296 km across seven lines and 160 stations – it is planned to be extended to 430 km with 11 lines. India is the world's second-largest cement producer. Iran produces 62 million tonne of cement every year, the fifth in the world, and is exporting to neighbouring countries. In renewable energy, we encourage private companies to invest in power plants. We have a programme through which private companies can sell whatever they produce on the stock-exchange market. If not for the 7,200-km International North-South Transport Corridor (INSTC), cargo would have had to travel some 16,000 km through the traditional Suez Canal sea route and taken around 45-60 days compared to around 25 days now. This transport corridor significantly reduces transit time and the freight cost between India and Central Asia by around 30 per cent. (The Russia to India route comprises travel via St Petersburg, the Caspian Sea port city of Astrakhan, the northern Iranian port of Anzali and from Bandar Abbas in the Persian Gulf to Navi Mumbai in India.) The corridor links India with Iran to Central Asia and Russia and has the potential to expand up to the Baltic, Nordic and Arctic regions. In terms of regional connectivity, it strengthens India's ties with Central Asian countries, Iran and Russia, opening up new avenues for collaboration in sectors such as energy, infrastructure and technology. Development and utilisation of the INSTC can lead to significant investments in infrastructure, including ports, railways and road networks, and facilitate transportation of energy resources such as oil and gas from Central Asia and Russia to India, which can help India diversify its energy sources and improve energy security. Thus, by leveraging the INSTC, India can enhance its strategic and economic position in the region, promoting sustainable growth and development. In a recent development for INSTC, Russia and Iran have signed an agreement to complete the 164-km Astara-Rasht railroad as the final missing part that would link Russia to ports on the Persian Gulf via railroad. This will reduce time to haul cargo from St Petersburg to Mumbai. When that section is complete (expected soon), it will allow uninterrupted rail transport along the INSTC, aiming to connect Russia to the Indian Ocean. So, while no major project has been undertaken by Iran in India or by India in Iran, with the signing of the Chabahar agreement and full operationalisation of the INSTC corridor, the situation will change meaningfully for our countries.