France's Renault will build its no-frills Logan (L90) car in Iran under a joint venture deal signed on Wednesday, despite a tussle over exports which had threatened the plans.
The project is seen as a litmus test for foreign investment at a time when Iran is under mounting international pressure over its nuclear programme. Economists say such investment is essential to create jobs in a country with high unemployment.
Iran suspended the project in April, demanding that 20 percent of world-wide exports of the Logan model be sourced from Iran. Under Wednesday's deal, the two sides agreed to export 20 percent of Iranian production of the car.
"The acceptance of the conditions of the Iranian partner means we will be able to export at least 20 percent of our products through Renault's sales network," Industries and Mines Minister Alireza Tahmasbi said at the signing ceremony.
It was not clear how many cars this would involve.
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