Iran-Russia H1 Transactions Rise by 42% to $2.7 Billion

Trade turnover between Russia and Iran in January-July amounted to $2.7 billion, the Russian Foreign Ministry said in a statement.
"We note the progress in negotiations for a full-fledged free trade agreement between Iran and EEU [Eurasian Economic Union]. Four rounds of consultations have already taken place; we expect that the desired result will be achieved as soon as possible. This will give additional impetus to bilateral trade and economic interaction, the volume of which continues to grow. Between January and July of this year, trade turnover amounted to $2.7 billion. This is 42.5% more than during the same period of last year," the Russian Foreign Ministry said in a statement reported by News.am.
Iran and the Eurasian Economic Union signed a three-year provisional agreement in Astana, Kazakhstan, on May 17, 2018, for the bloc to welcome Iran into EEU. The arrangement, which has lowered or abolished customs duties, is the first step toward implementing free trade between Iran and the five members of the union. 
The two sides are in talks to upgrade the agreement to a free trade deal.
As part of the free trade agreement, Iran is negotiating the Eurasian Economic Union, 80% of goods traded between the two sides will be entitled to zero customs tariffs, according to Mirhadi Seyyedi, advisor to Trade Promotion Organization of Iran in international affairs and trade treaties. He is the lead negotiator in talks with EEU.
“Never before have we had an agreement as inclusive as this [the prospective free trade deal with EEU]. Clearly, when the provisional agreement is upgraded to a free trade treaty, our foreign trade will get a considerable boost,” Seyyedi was quoted as saying by IRNA.
The next round of talks on a full-fledged free trade agreement between EEU and Iran will take place in Moscow at the end of September. The decision was agreed at the meeting of the Eurasian Economic Commission’s trade representative, Andrey Slepnev, with Iranian Deputy Minister of Industries, Mining and Trade Alireza Peymanpak, BelTA learned from the EEC press service.
The parties praised the level of trade and economic cooperation between the Eurasian Economic Union and Iran. 
Peymanpak said that this year, the mutual trade and transit of goods through Iran in the North-South direction has risen by almost 50%.
According to Slepnev, significant progress in the transition to settlements in national currencies has been of special importance in the current environment. 
“The latest key positive development has been the start of trade in the ‘ruble-rial’ currency pairs,” the EEC minister said.
The parties outlined a further schedule for negotiations on the future agreement. 
“We expect significant progress in the tariff part, which will bring the final stage of the negotiation process closer,” Slepnev concluded.
Iran and EEU member states traded more than 1.4 million tons of goods worth $697 million during the first quarter of the current Iranian year (March 21-June 21), data released by the Islamic Republic of Iran Customs Administration show.
Iran’s exports to the bloc stood at 681,000 tons worth $233 million during the period, registering a 4% rise in tonnage but an 11% decline in value compared with the similar period of last year.
Russia was Iran’s biggest export destination among EEU states with 303,000 tons worth $115 million, registering a 14% and 23% rise in weight and value respectively year-on-year, IRIB News reported.
Iran’s imports from EEU countries stood at 748,000 tons worth $464 million during the three months under review, indicating a 32% and 34% rise in weight and value respectively compared with the corresponding period of last year.
Russia also topped the list of exporters with 586,000 tons worth $394 million, registering a 14% and 23% YOY rise in tonnage and value respectively.
“Russia supports Iran's admission to the Shanghai Cooperation Organization. We expect Iran to sign a memorandum of commitment at the SCO summit in Samarkand in September 2022," the Russian Foreign Ministry’s statement added.
According to data released by the Islamic Republic of Iran Customs Administration, in 2021, Russia exported $1.7 billion worth of goods to Iran to account for 3.1% in Iran’s total imports.
In return, Russia imported around $1.1 billion worth of goods from Iran, accounting for 1.2% of Iran’s total exports last year.
Russia’s 2021 export to Iran increased by 56% and Russia’s import from Iran rose 15% in comparison with 2020.
About 66% of Russia’s total export value to Iran were cereals, mainly wheat.
The main product exported to Russia from Iran were pistachio, with the share of 9.1% from total exports.

Biggest Russian Business Mission to Visit Iran 

A 125-strong business delegation from Russia made up of representatives of 78 companies are scheduled to visit Tehran from Sept. 19 to 21 to meet their Iranian counterparts and survey ways of expanding cooperation.
Members of the visiting delegation are active in a host of fields, including agriculture, food and related machinery, mineral water, beverages, grains, chocolate and pastry, edible oils, fisheries, packaging, health, pharmaceuticals, medical equipment, construction materials, glass and crystal, wood industries, auto spare parts, transportation, industrial machinery, metal industries, radio and telecommunication systems, excavation, energy, recycling, digital marketing and education, the news portal of Tehran Chamber of Commerce, Industries, Mines and Agriculture reported. 
The upcoming visit is part of an agreement between Tehran Chamber of Commerce and the Russian Export Center. It is said to be the biggest delegation to have visited Iran so far.

Trade in National Currencies

Iran and Russia have started trading in their national currencies. 
Iranian ambassador in Moscow, Kazem Jalali, said recently that entities in the two countries have started conducting trade in rial and ruble for the first time. The currencies were handled by the Russian Central Bank’s Mir system, IRNA reported. 
Russia set up Mir in 2014 in response to sanctions over the conflict with Ukraine. 
Iran and Russia have been working toward using their own currencies for business relations for some time. Iranian Economic Minister Ehsan Khandouzi announced in July that the Islamic Republic has officially ditched the US dollar for trade with Russia. 
The same month, Tehran Stock Exchange launched rial-ruble trading. 
Iran, like other countries, typically conducts trade in US dollars. Trading with Russia in rials and rubles allows Iran to further bypass the US-dominant global financial system. For example, in 2019, the international financial messaging system SWIFT cut access for most Iranian banks under pressure from Washington. 
Some Russian banks were also barred from using SWIFT in February in response to the Russian invasion of Ukraine. 
The US dollar could be losing a small bit of its dominance in the Middle East. Saudi Arabia and China have also discussed pricing oil deals in yuan instead of the dollar. India also decided last month to allow rupee payments for imports and exports, which could also boost trade with Iran, Al-Monitor reported.