Iran’s trade with 15 neighboring countries reached 13.18 million tons worth $8.32 billion in the first two months of the current fiscal year (March 21-May 21), latest data released by the Islamic Republic of Iran’s Customs Administration show.
The UAE was Iran’s biggest trade partner with 3.8 million tons worth $3.75 billion. It was followed by Turkey with 1.31 million tons worth $1.64 billion and Iraq with 4.15 million tons worth $1.34 billion.
Total exports to neighbors stood at 10.17 million tons worth $4.53 billion during the period%), IRNA reported.
The UAE with 2.16 million tons worth $1.5 billion was the biggest export destination. It was followed by Iraq with 4.13 million tons worth $1.32 billion, Turkey with 813,960 tons worth $765.59 million, Afghanistan with 449,002 tons worth $225.62 million and Oman with 558.55 tons worth $203.27 million.
Total imports from neighboring countries during the period hit 3.01 million tons worth $3.79 billion.
Shipments mainly came from the UAE with 1.64 million tons worth $2.25 billion, Turkey with 499,979 tons worth $874.94 million, Russia with 443,681 tons worth $319.14 million, Oman with 154,647 tons worth $127.97 million and Pakistan with 145,111 tons worth $125.15 million.
Iran’s 15 neighboring countries are Iraq, Turkey, Afghanistan, Pakistan, Russia, Oman, Azerbaijan, Turkmenistan, Kuwait, Qatar, Kazakhstan, Armenia, the UAE, Bahrain and Saudi Arabia.
Iran traded $36.45 billion worth of non-oil goods with neighboring countries in the last Iranian year (ended March 20, 2022) while the preceding year’s figure stood at $40 billion.
Neighbors account for about half of Iran’s total international trade.
Iran’s total trade, excluding crude oil exports, during the two months stood at 22,196 tons worth $16.63 billion.
Exports hit 17,014 tons worth $8.52 billion, registering a 1.6% and 37% year-on-year growth in weight and value respectively.
China with $2.72 billion, accounting for 32% of Iran’s total exports, was the main destination of Iranian goods during the period. It was followed by the UAE with $1.5 billion (17.63%), Iraq with $1.31 billion (15.41%), Turkey with $766 million (9%) and India with $290 million (3.41.
Imports stood at 5,182 tons worth $8.12 billion, registering a 3.37% decline in weight, but a 24% growth in value compared with the corresponding period of last year.
The UAE with $2.25 billion, accounting for 27.69% of Iran’s total imports, was the top exporter to Iran during the period. It was followed by China with $2.12 billion (26%), India with $2.12 billion (26%), Turkey with $875 million (10.78%) and Russia with $319 million (3.93%).
The IRICA data show Iran registered $401 million in trade surplus during the two months ending May 21.
UAE: Iran’s Major Trade Partner
The UAE is one of Iran’s biggest trading partners.
“Despite the significance of the UAE in Iran’s foreign trade, the two countries have yet to forge an agreement to avail themselves of preferential trade tariffs,” says Farshid Farzanegan, former chairman of Iran-UAE Chamber of Commerce.
“Due to geographical locations, cultural, trade and historical relations between Iran and the UAE, as well as the volume of annual imports, the country offers a golden opportunity for Iranian economic players,” he was quoted as saying by Fars News Agency.
“In 2019, the UAE’s exports stood at $248 billion while its imports hit $235 billion and as the world’s 24th largest exporter and 22nd largest importer, it has a significant position in the international economy and global value chains.”
According to Farzanegan, the UAE’s average trade volume with Iran from the fiscal 2010-11 to fiscal 2018-19 stands at $13 billion.
The average annual trade volume for the eight-year period stands at $13 billion with China, $5.5 billion with South Korea, $5.5 billion with Turkey and $5 billion with Iraq, indicating that the UAE has been the leading trade partner of Iran over the years.
According to the formal official, Iran’s major exports to the UAE are vegetables, lead, melon, grapes, spice and cement, with each Iranian product having an over 10% share in the Emirati market.
Noting that the most important trade hurdle between the two countries pertains to banking and money transfer, he said the ceiling for trade insurance coverage between the two sides is insufficient.
“It is not possible for traders to open letters of credit. Non-existence of consortiums for export of technical and engineering services is another problem,” he said.
"This is while trade infrastructure in the UAE is very strong. Therefore, we must upgrade and develop our infrastructure accordingly, to develop trade relations with this country.”
He noted that Iran’s geopolitical and geoeconomic advantages allow for transport of goods from Turkey and CIS states to the UAE.
The UAE-Turkey transit corridor through Iran became operational with the first shipment from the UAE port of Sharjah en route to the Turkish port of Mersin docking at the Iranian Shahid Rajaee Port in November 2021 before reaching Turkey through the Bazargan border crossing in northwest Iran.
Mohammad Hossein Rezaian, an expert in the field of transit, told Mehr News Agency that the consignment entered the port of Shahid Rajaee in southern Iran along the Persian Gulf from the UAE and reached the Turkish port of Mersin.
Rezaian noted that the new route shortens the former transit route by 12 days, meaning that it will take eight days for the shipments to reach Turkey's port through Iran from UAE's Sharjah while the previous route had to cross the Bab al-Mandeb Strait, the Red Sea and the Suez Canal and all the way to Turkey, which would take 20 days.
Noting that the UAE has zero tariff on imports of almost all types of commodities, except 5% on Iranian cement, Farzanegan said it is necessary for Iran to facilitate import from the UAE by establishing preferential tariffs.
Iran levies high tariff rates on imports, reaching as high as 40% on certain commodities.
“We practically have no preferential tariff agreement with any country. An agreement has been concluded with Turkey, negotiations have been held with Pakistan and during a recent visit of Minister of Industries, Mining and Trade Reza Fatemi-Amin to the UAE, negotiations have been held to this end, but an agreement has yet to be made,” he said.
An Iranian delegation led by Fatemi-Amin visited the UAE in February.
President of Iran Chamber of Commerce, Industries, Mines and Agriculture Gholamhossein Shafei and the head of Trade Promotion Organization of Iran, Alireza Peymanpak, also accompanied the visiting mission and participated in a joint forum titled “Business and Investment Opportunities” on Feb. 8.
Iran’s first trade center licensed by Trade Promotion Organization of Iran was recently inaugurated in Dubai.
As Iran Chamber of Commerce, Industries, Mines and Agriculture reported, the center is aimed at helping Iranian companies find a foothold in the UAE, particularly Dubai that happens to be one of the main hubs of Iran’s trade in the region.
It also seeks to use advanced information technology to create a platform that facilitates business activities of Iranian firms in the Emirati market by providing technical advice and consultation services.
