Non-oil trade between Iran and Muslim nations reached $8.46 billion in the first two months of the current fiscal year (March 21-May 21), the Islamic Republic of Iran Customs Administration reported.
The UAE with $3.8 million tons worth $3.75 billion, Turkey 1.31 million tons worth $1.64 billion and Iraq 4.15 million tons worth $1.34 billion were Iran’s main trade partners among member states of the Organization of Islamic Conference.
Total Iranian exports were registered $4.87 billion.
The UAE with 2.16 million tons worth $1.5 billion, Iraq 4.13 million tons worth $1.31 billion and Turkey 813,960 tons worth $765.59 million were the main export destinations.
Imports stood at 2.6 million tons worth $3.59 billion. The UAE with 1.64 million tons worth $2.25 billion, Turkey 499,979 tons worth $874.94 million and Oman 154,647 tons worth $127.97 million were listed as the major exporting nations.
Founded in 1969, the OIC has 57 members, including Iran, with 47 countries being Muslim majority countries. Some, especially in West Africa, have large Muslim populations that necessarily do not form a majority.
Iran traded 100.15 million tons of goods (minus crude oil export) worth $52.6 billion with the OIC states in fiscal 2021-22 (ended March), according to IRICA. This was 43% on the year before.
The UAE with 23.48 million tons worth $21.46 billion, Turkey 19.46 million tons worth $11.39 billion and Iraq 32.58 million tons worth $10.11 billion were Iran’s key trading partners in the OIC a year ago.
Iran’s exports reached 78.67 million tons worth $27.68 billion.
Iraq with 29.88 million tons worth $8.92 billion, Turkey 15.74 million tons worth $6.09 billion and the UAE 10.76 million tons worth $4.93 billion were the top export destinations.
Imports stood at 21.47 million tons worth $24.92 billion. The UAE with 12.72 million tons worth $16.53 billion, Turkey 3.73 million tons worth $5.3 billion and Iraq 2.7 million tons worth $1.2 billion were among the main exporters.
UAE a Key Partner
Despite the role and significance of the UAE in Iran’s foreign trade, the two neighbors have yet to sign an agreement on preferential trade tariffs, says Farshid Farzanegan, a former chairman of the Iran-UAE Chamber of Commerce.
“Due to geographical, cultural, trade and historical relations between Iran and the UAE plus the volume of annual imports [from the Emirates], that country offers an opportunity to Iranian companies,” he was quoted as saying by Fars News Agency, noting that the Arab neighbor plays an important role in international trade and global value chains.
Farzanegan, who now is a member of the joint chamber’s board of directors, the UAE’s average annual trade with Iran from fiscal 2010-11 to fiscal 2018-19 stood at $13 billion. This was $13 billion for China, $5.5 billion South Korea, $5.5 billion Turkey and $5 billion Iraq.
Iran’s exports to the UAE include vegetables, lead, melon, grapes, spice and cement with each Iranian item having almosst 10% share of the Emirati market.
Noting that a major constraint in two-way trade is banking and money transfer, he noted that the ceiling for insurance cover for bilateral trade is insufficient.
Moreover, it is not possible for traders to open letters of credit. The lack of consortiums for export of technical and engineering services is another problem.
"This is while trade infrastructure in the UAE is robust. Therefore, to develop trade with this country, we must upgrade and develop our infrastructure. Iran’s geopolitical and geo-economics advantages allow for transport of goods from Turkey and the CIS states to the UAE.”
The UAE-Turkey transit corridor through Iran became operational with the first shipment from the UAE port of Sharjah to the Turkish port of Mersin docking at the Iran’s Shahid Rajaei Port in November 2021 before reaching Turkey through the Bazargan border in northwest Iran.
Mohammad Hossein Rezaian, an expert on the transit industry, told Mehr News Agency that the cargo entered Shahid Rajaee in south Iran on the Persian Gulf and reached the Turkish port of Mersin.
The new route shortens the travel time by 12 days, meaning that it will take eight days for the shipment to reach Turkey via Iran from Sharjah. In the past ships had to cross the Bab al-Mandeb Strait, the Red Sea and Suez Canal to reach Turkey after 20 days.
Noting that the UAE has zero tariff on imports of almost all goods except Iranian cement with a 5%, Farzanegan said it is crucial for Iran to forge a preferential tariff agreement with the UAE to be able to boost trade.
Iran import tariffs are among the highest in the world -- as high as 40% on some items.
“We have no preferential tariff agreement with any country. A deal has been concluded with Turkey and negotiations held with Pakistan. In a recent visit by the Minister of Industries, Mining and Trade Reza Fatemi-Amin to the UAE, the two sides discussed the prospects for preferential trade and tariffs. However, an agreement is pending.
Iran’s first trade center licensed by the Trade Promotion Organization of Iran was inaugurated in Dubai in December 2021.
The Iran Chamber of Commerce, Industries, Mines and Agriculture reported that the center should support Iranian companies find a foothold in the UAE, Dubai in particular, which is one of the hubs of Iran’s trade in the strategic region.
It also seeks to use advanced information technology to create a platform that facilitates Iranian businesses in the Emirati market with technical advice and consultation.
The Foreign Ministry in Tehran has said it supports closer ties to neighbors, including the UAE, calling for regular consultations between the two neighbors.
