The government is likely to enter into a deferred payment arrangement with Iraq despite dues of Indian exporters touching $760 million, an external affairs ministry source said. A final decision is to be taken at the three-day meeting of the Indo-Iraqi joint commission that began yesterday.
The government is also trying to recover as much possible of the pending amount, including principal and interest due to 25 Indian companies in both public and private sectors. It has also decided, in principle, to extend a line of credit worth $25 million to Iraq. As Iraqi payments are largely made in oil, the government has decided to increase the quota of oil purchase by 0.55 million metric tonnes taking the total purchase to 1.5 million metric tonnes in 1998-99.
The government will try to persuade the Central Bank of Iraq to certify bills and receivables upto March 31, 1998. Payment receivables by Indian exporters have been certified till September 30, 1995 for DPA projects and upto June 30,1994 for non-DPA projects. The commerce ministry is to ascertain from its Iraqi counterpart the status of machinery of Indian companies left behind in the country during the war and arranging suitable compensation for them. It will also try to persuade the Iraqis to cancel the expired bank and government gaurantees and get them issued again, if required, by Indian companies.
More From This Section
The government does not want the issue of pending dues to come in the way of reviving the Iraqi market for Indian exports. Iraq was the single largest market for Indian construction companies which had 66 projects worth Rs 5,200 crores under execution at the time of the Iran-Iraq war in 1980.
The industry ministry has identified several sectors including machine tools, power, water resources, telecommunications, railways, cement, petro-chemicals and fertilisers, petroleum, steel and non-ferrous and automobile industries which can expect export opportunities in Iraq.
The ministry of railways, too, is trying to persuade the Iraqis to use its expertise in operation and maintenance of railways and expressways, computer software and operation and consultancy services in non-railway sectors like airports, roads, ports and harbours. The India Trade Promotion Organisation has arranged for a major participation by India in the Baghdad International fair to be held in November,1998. It had also participated in the last fair in Baghdad in November,1997.