The ban on imports of 1,539 items and restrictions on the import of 722 products saved up to $5.8 billion for the country from March 20, 2020, to March 5, 2021.
According to an IRNA report citing the Ministry of Industries, Mining and Trade, order registrations, the process of listing import items with the customs authorities, reduced by 15.6% during the period under review. Provision of foreign currency to imports of products related to the ministries of industries, agriculture and health fell by 17%.
This is while the share of forex provision from resources gained from exports increased from 33.6% to 45% by Feb. 3.
Over 11 months to Feb. 18, the share of capital goods in imports increased from 13% to 14% and that of intermediate goods rose from 67.2% to 70% while the share of consumer goods dropped from 17.2% to 16% year-on-year.
Minister of Industries, Mining and Trade Alireza Razm-Hosseini said the current restrictions or total ban on imports will continue even if sanctions against Iran are lifted.
“These measures are aimed at giving a boost to domestic production,” he was quoted as saying by IRNA.
“The production of parts in many industries has been localized such that domestic manufacturers account for 75% of home appliances and 80% of car production.”
According to Mehdi Mirashrafi, the head of the Islamic Republic of Iran Customs Administration, a total of 23.1 million tons of essential goods, including corn, cellphones, rice, soybean meal, oilseeds, wheat and unprocessed oils, worth $12 billion were imported in the fiscal 2020-21.
Iran imported 3.5 million tons of essential goods worth $9.7 billion from China, 5 million tons worth $9.6 billion from the UAE, goods worth $4.3 billion from Turkey, 2.2 million tons worth $2.1 billion from India and 1.2 million tons worth $1.8 billion from Germany in the year to March 20.
Also known as necessity goods, essential goods are products consumers will buy, regardless of changes in income levels.
Following the re-tanking of the national currency in early 2017, the government introduced stringent rules like banning the imports of 1,339 items categorized as Group IV—products that were deemed non-essential and have domestic counterparts in the market—in a move to economize on foreign currency amid US sanctions.
IRICA stopped clearing Group IV merchandise despite the fact that more than €70 million worth of them had already arrived at the country’s ports. The administration once allowed for the clearance of Group IV products on certain conditions from Feb. 18-Sept. 16, 2020. However, there are still goods abandoned at customs terminals across the country, some of which are on the brink of decay (perishable goods).
The government also decided to allocate subsidized currency at the rate of 42,000 rials per US dollar to 25 categories of goods (also known as Group I or essential goods) to help protect consumers against galloping inflation, rampant price gouging and hoarding, not to mention the high and rising cost of living.
Two other categories of imports were also defined: Group II, which mostly included raw materials, intermediate and capital goods, and Group III consisting of essential consumer goods.
Importers of products in Group II were to meet their forex requirements from the secondary forex market. Importers of goods in Group III could buy hard currency from exporters who were not required to offer their forex earnings on Nima.
As part of the budget bill for the new fiscal year that began on March 21, the exchange rate for subsidized imports of essential goods remains unchanged at 42,000 rials per dollar.
However, according to Mojgan Khanlou, a senior official with the Plan and Budget Organization of Iran, the government is allowed to gradually discontinue the allocation of subsidized forex to essential goods import during the first half of the fiscal 2021-22.
Importers of goods included in Group IV of customs categories, i.e., non-essential goods, were recently allowed to discharge their commodities provided that they had completed banking import registration and foreign currency provision procedures.
According to Mehrdad Jamal Orounaqi, a senior official with the Islamic Republic of Iran Customs Administration, the customs clearance of Group IV goods is not subject to time limitations and importers have been allowed to initiate the procedure starting Feb. 13, ISNA reported.
