India, Iraq to explore possibility of trade in own currencies

India and Iraq will look at the possibility of trading in their local currencies, commerce and industry minister Anand Sharma said on Friday in the presence of visiting Iraqi Prime Minister Nouri Kamil Al-Maliki.

This would insulate India's oil imports from Iraq from the volatile movement of the Indian rupee against the US dollar, Sharma said.

''We are exploring the possibility of trading in local currencies, the dinar and rupee. Our officials will discuss this,'' he said, addressing a session organised by Indian business chambers with Al-Maliki.

 The Iraqi PM, too, assured industry that his government was aware of exchange-related problems. ''We are working to resolve the problem,'' Al-Maliki said answering an industry representative who raised concerns about exchange rate losses.

The meet was organised by industry chambers CII, FICCI and Assocham.

Sharma also stressed Iraq's growing importance in meeting India's energy needs. ''Iraq has emerged as the second largest exporter of oil to India. In the coming months, no doubt it will compete for the top spot,'' the minister said.

India imported 24 million tonnes of crude from Iraq in 2012-13, which was second only to Saudi Arabia. Iraq toppled Iran as the second largest supplier of oil to India more than a year back, following US and EU sanctions on the country.

Pharmaceuticals, health services, IT and auto components are the other areas where Iraq holds huge opportunities for Indian business, the minister said.

Al-Maliki said Iraq had missed out on a number of opportunities during the years of dictatorship and wanted to learn from India's experience and expertise. Apart from trading in oil, Iraq and India could form partnerships for exploration of oil and building of oil refineries. Agriculture, health and education, too, held a lot of prospects, he said.

The two countries are looking at finalising a number of memorandums in areas such as energy, fertiliser, agriculture, trade, healthcare, legal assistance and science and technology sectors. Many of these MoUs are expected to be signed during the Iraqi PM's ongoing visit.