Iran traded 60.87 million tons of goods worth $31.9 billion with six Persian Gulf littoral states, namely Iraq, Kuwait, Qatar, the UAE, Bahrain and Saudi Arabia, in the fiscal 2021-22 (ended March 20), latest data released by the Islamic Republic of Iran Customs Administration show.
The UAE was Iran’s top trade partner among the states under review with 23.48 million tons worth $21.46 billion. It was followed by Iraq with 32.58 million tons worth $10.11 billion and Kuwait with 3.6 million tons worth $172.89 million.
Iran’s exports totaled 45.43 million tons worth $14.15 billion.
Iraq was the main export destination with 29.88 million tons worth $8.92 billion and was followed by the UAE with 10.76 million tons worth $4.93 billion, Kuwait with 2.59 million tons worth $158.07 million, Qatar with 1.81 million tons worth $133.65 million, Bahrain with 14,498 tons worth $9.73 million and Saudi Arabia with 429 tons worth $41,405.
Imports stood at 15.43 million tons worth $17.76 billion.
The UAE topped the list of exporters to Iran among Persian Gulf states with 12.72 million tons worth $16.53 billion. It was followed by Iraq with 2.7 million tons worth $1.2 billion, Kuwait with 8,110 tons worth $14.81 million, Qatar with 2.49 tons worth $9.56 million and Bahrain with 113 tons worth $1.47 million.
Iran’s trade with Persian Gulf littoral states reached 50.76 million tons worth $22.36 billion in the year ending March 20, 2021.
Considerable Turnover With UAE
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 the 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, this country is 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 the former official, who is no member of the joint chamber’s board of directors, the UAE’s average trade volume with Iran since fiscal 2010-11 stands at $16 billion. From the fiscal 2010-11 to fiscal 2018-19, the figure stands at $13 billion.
The average annual trade volume figure 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.
Farzanegan noted that 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 hurdle in the way of trade between the two countries pertain to banking and money transfer issues, he said the ceiling for insurance coverage of trade between the two sides is insufficient. Moreover, 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 added.
"This is while the trade infrastructure in the UAE is very strong. Therefore, in order to develop trade relations with this country, we must upgrade and develop our infrastructure accordingly. Iran’s geopolitical and geoeconomics advantages allow for transport of goods from Turkey and the CIS states to the UAE,” he said.
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 Rajaei 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 south Iran on the Persian Gulf from the UAE and reached the Turkish port of Mersin.
The expert said 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 for Iranian cement with a 5%, 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 in 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.
Iran’s first trade center licensed by Trade Promotion Organization of Iran was recently inaugurated in Dubai, the UAE.
As Iran Chamber of Commerce, Industries, Mines and Agriculture reported, the establishment is aimed at helping Iranian companies find a foothold in the UAE, Dubai in particular, which 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.
Iran’s Foreign Ministry has voiced the administration’s determination to broaden relations with neighbors, including the UAE, calling for constant consultations between Tehran and Abu Dhabi.
