Iran traded 3.61 million tons of goods worth $1.9 billion with six Persian Gulf littoral states, namely Iraq, Kuwait, Qatar, the UAE, Bahrain and Saudi Arabia, in the first month of the current fiscal year (March 20-April 20), latest data released by the Islamic Republic of Iran Customs Administration show.
The UAE was Iran’s top trade partner among the Persian Gulf states under review with 1.69 million tons worth $1.45 billion. It was followed by Iraq with 1.42 million tons worth $436.61 million and Kuwait with 436,262 tons worth $13.59 million.
Iran’s exports totaled 2.92 million tons worth $1.12 billion.
The UAE was the main export destination with 1 million tons worth $667 million and was followed by Iraq with 1.42 million tons worth $426.36 million, Kuwait with 436,160 tons worth $13.36 million and Qatar with 60,227 tons worth $7.47 million, Bahrain with 638 tons worth $466.
Imports stood at 685,989 tons worth $786.47 million.
The UAE topped the list of exporters to Iran among the Persian Gulf states with 679,142 tons worth $778.38 million. It was followed by Iraq with 6,647 tons worth $10.25 million, Kuwait with 103 tons worth $205,792, Qatar with 87 tons worth $562,991 and Bahrain with 9 tons worth $71,843.
Iran traded 60.87 million tons of goods worth $31.9 billion with Persian Gulf littoral states in the fiscal 2021-22, up from $22.36 billion in the year before. Exports totaled 45.43 million tons worth $14.15 billion as imports stood at 15.43 million tons worth $17.76 billion.
Cooperation in Preparation for Qatar World Cup 2022
Iran plans to cooperate with Qatar in preparation for the World Cup 2022.
Bilateral arrangements include launching regular shipping lines between the ports of the two countries and making more use of Qatari commercial airlines along with Iranian airlines during the World Cup.
“Kish is the focal point of these arrangements, although other coastal and non-coastal provinces in Hormozgan and Bushehr provinces close to the Persian Gulf can also play a role in supporting the event,” Iranian Minister of Roads and Urban Development Rostam Qasemi said in a recent meeting with his Qatari counterpart on the resort island.
Iran's cooperation with Qatar on World Cup 2022 was initiated in February 2021 when Kish Free Zone Organization allocated 520 billion rials ($1.8 million) to equip and develop the infrastructures of Kish Island.
Kish officials are hoping to attract spectators willing to visit nearby touristic locations during the intervals of their favorite matches.
“We have increased the number of five-star hotels on Kish Island from 10 to 15, launched two football fields and two bodybuilding complexes and upgraded three football pitches,” Saeed Mohammad, secretary of the Supreme Council of Free Trade and Special Economic Zones of Iran, was quoted as saying by IRNA.
To make preparations for the big event, Mohammad noted that the ministries of Cultural Heritage, Tourism and Handicrafts; Roads and Urban Development; Sports and Youth Affairs; and Economic Affairs and Finance, in addition to the Ports and Maritime Organization of Iran, have joined forces.
With an area of 92 square kilometers and a population of 42,000, Kish Island is located in Bandar Lengeh County of Hormozgan Province, off the southern coast of Iran in the Persian Gulf. It has been declared the fourth tourist destination in Southwest Asia by the UNESCO Cultural Heritage List.
Kish Island is among the most beautiful coral islands in the Persian Gulf.
The distance between Kish Island and Qatar is 270 km. Kish to Doha flight takes 40 minutes while the sea journey takes 5 to 6 hours.
The 2022 FIFA World Cup is the 22nd edition of the FIFA World Cup competition, contested by the national teams of the member associations of FIFA.
It is scheduled to take place in Qatar from Nov. 21 to Dec. 18, 2022. This will be the first World Cup ever to be held in the Middle East and it will be the second World Cup held entirely in Asia after the 2002 tournament was held in South Korea and Japan.
President Ebrahim Raisi left Tehran for Doha, Qatar, in March to meet Qatari Emir Sheikh Tamim bin Hamad Al Thani and attend a summit meeting of the Gas Exporting Countries Forum.
Iran and Qatar have been forging stronger economic ties ever since a number of Arab states led by Saudi Arabia abruptly severed diplomatic relations with Doha in June 2017 and imposed a blockade on the Persian Gulf country, accusing it of supporting terrorist groups.
The Qatari government denied the allegation as baseless, blasting the blockade as unjustified and a violation of international law.
Following the development, Iranian exporters have vied for the Qatari market in the absence of Doha's traditional Arab partners.
Qatar shares the world's largest natural gas field with Iran.
UAE: Iran’s Major Trade Partner
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 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 the former official, the UAE’s average trade volume with Iran since the 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 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 those 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 pertains to banking and money transfer issues, he said the ceiling for insurance coverage of trade between the two sides is insufficient and it is not possible for traders to open letters of credit.
Farzanegan stressed that the non-existence of consortiums for exporting technical and engineering services is another problem.
"This is while 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 geoeconomic advantages allow for the 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 Rajaee Port in November 2021 before reaching Turkey through the Bazargan border crossing in northwest Iran.
With a capacity of loading and unloading 6.5 million TEUs of containers per year, Shahid Rajaee is the main Iranian hub for trading with Persian Gulf countries.
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 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 the 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 that has a 5% customs duty, 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 signed.
Iran’s first trade center licensed by the 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.
Resumption of Trade With Saudi Arabia
After a gap of around two years in bilateral trade, Iran has exported a total of $41,140 worth of commodities to its southern neighbor Saudi Arabia since Ebrahim Raisi’s presidential term began in August, spokesperson of the Islamic Republic of Iran Customs Administration said in late 2021.
“From total exports, $39,100 belonged to a specific type of glass used in traffic signs,” Rouhollah Latifi was also quoted as saying by ILNA, adding that the neighboring country also bought some 4 kilograms of saffron worth more than $2,000 from Sept. 23 to Oct. 22.
This, the official added, marks a new beginning in Iran and Saudi Arabia’s economic, political and cultural relations.
