Directorate of Intelligence, CIA

“ India and Iran have concluded a major trade agreement that, will go a long way toward ensuring that India’s oil requirements are met. In return, India will supply cement, steel products, rail cars, machinery, and fishing trawlers. ”

“ In addition, India’s balance-of-payments problem will be considerably eased because India will be allowed to pay part of its oil import bill with future exports to Iran. By providing 65,000 tons of steel and 300,000 tons of cement to Iran, however, India could intensify its already critical domestic shortages of both products. ”

“ President Ceausescu, who announced this radical change from present policy in a recent interview, obviously sees a political need to improve the lot of the consumer. An economic rationale may be anticipated balance-of-payments problems caused by large imports of machinery and equipment. ”