Iran’s trade with Shanghai Cooperation Organization’s member states, excluding crude oil exports, reached 24.51 million tons worth $19.66 billion during the first six months of the current fiscal year (March 21-Sept. 22), registering a 2.71% and 30.67% growth in weight and value year-on-year, respectively, latest data released by the Islamic Republic of Iran Customs Administration show.
China with 16.77 million tons worth $14.68 billion was Iran’s main trade partner among SCO member states during the period, registering a 2.29% and a 26.51% increase in terms of weight and value, respectively, compared with the same period of last year.
It was followed by India with 3.12 million tons (down 7.72%) worth over $2.28 billion (up 60.19%) and Russia with 2.08 million tons (up 17.29%) worth $1.21 billion (up 33.67%).
Iranian exports hit 19.61 million tons worth $9.92 billion, registering a 3.42% decline in weight, but a 15.95% growth in value YOY.
China with 14.91 million tons (up 0.54%) worth $7.84 billion (up 19.39%), India with 2.2 million tons (down 24.39%) worth $904.12 million (up 8.94%) and Pakistan with 1.31 million tons (down 3.41%) worth $560.72 million (up 3.05%) were the main export destinations.
Imports stood at 4.89 million tons worth $9.74 billion, registering a 37.79% and 50.09% increase in terms of weight and value, respectively.
China with more than 1.85 million tons (up 18.94%) worth $6.84 billion (up 35.79%), India with 915,063 tons (up 96.92%) worth $1.37 billion (up 131.55%) and Russia with 1.46 million tons (up 15.1%) worth $876.1 million (up 37.19%) were the major exporters.
The Shanghai Cooperation Organization is a Eurasian political, economic and security organization. In terms of geographical scope and population, it is the world's largest regional organization, covering approximately 60% of the area of Eurasia, 40% of the world population and more than 30% of global GDP.
SCO is a successor to the Shanghai Five, a mutual security agreement formed in 1996 by China, Kazakhstan, Kyrgyzstan, Russia and Tajikistan. On 15 June 2001, the leaders of these nations and Uzbekistan met in Shanghai to announce a new organization with deeper political and economic cooperation; the SCO Charter was signed on July 7, 2002, and entered into force on Sept. 19, 2003. Its membership has since expanded to eight states, with India and Pakistan joining on June 9, 2017. Several countries are engaged as observers or dialogue partners.
A Step Closer to Asian Multilateralism
Iran signed a memorandum on Sept. 16 during the summit at Samarkand, Uzbekistan, for joining on joining SCO, the largest regional body in terms of population. The bloc is thriving as a multipolar body and is not West-centric.
Helping the country protect its core interest amid the United States-led sanctions that have for long crippled its economy, Iran’s accession to Shanghai Cooperation Organization demonstrates Tehran’s commitment to Asian multilateralism, Asian News International wrote citing Policy Research Group.
“The SCO accession is seen as a positive step forward for Iran, rather than a diplomatic triumph for the country that has long been battered by Western sanctions giving a blow to its economy. Iran can lead the way in emerging as a key partner for India and other Asian nations, especially through the International North-South Transportation Corridor.”
High Level Economic Ties Away From Sanctions
It is not yet known whether Iran and the United States will return to the Iran nuclear deal with six world powers, which the US unilaterally quit in 2018 and reimposed sanctions.
However, whether they do or not, it appears that Iran’s international isolation is nearing an end, read an op-ed published by Responsible Statecraft, as Iran signed a memorandum of obligations to become a permanent member of the Shanghai Cooperation Organization.
At a meeting in April 2023, full membership will be finalized. As a result, Iran will join an organization that represents 43% of the world’s population, making it the second largest international organization after the UN.
SCO has also become a high priority for both Russia and China. Its purpose is to act as an economic and foreign-policy counterweight to the US-led unipolar world.
Inception of SCO
Beginning with only six members in 2001, SCO eventually grew to a limited membership of eight when India and Pakistan joined in 2017.
Iran is being welcomed as the ninth member of the organization, though many more are now in line. Membership will grant Tehran high-level contacts and economic cooperation with Russia, China, India, Pakistan, and several Central Asian countries — nearly half the population of the world, making up 28% of the global GDP.
“Iran has historically been a trading nation,” Vienna-based strategy consultant Bijan Khajehpour told Responsible Statecraft.
“Sanctions disrupted the trade patterns, but Iran’s response to the US maximum pressure has been to focus on its immediate neighbors as well as on Eastern powers. The policy is primarily driven by security as well as economic imperatives. A full SCO membership will further facilitate Iran’s trade with Asian powers and Russia, compensating for the decline in trade with the EU that has decreased due to US sanctions.”
Though Iran is not so confident as to feel insulated from US sanctions, and though they may hope to keep the door to the West open, Iran’s choice may no longer be capitulation or isolation. The intended isolation of Iran, which has largely focused on sealing off the country’s western border, has caused a very large leak in the eastern one.
And Iran is not just breaking out of isolation globally in the East; they are also breaking out regionally in the Middle East.
In August, both the UAE and Kuwait announced that they will be returning their ambassadors to Tehran. Since both countries withdrew their ambassadors in 2016 in solidarity with Saudi Arabia, the moves suggest that Riyadh, though not yet reopening an embassy in Tehran, may approve of its fellow [Persian] Gulf states’ decision to pursue detente.
The possibility of a warming Saudi Arabia is supported by reports that Saudi Crown Prince Mohammed bin Salman has suggested a meeting between Saudi Arabia and Iran’s foreign ministers. The two countries, often bitter rivals in the region, have been talking since 2020. They have now met several times, and, on April 25 of this year, they held their “fifth round of ‘positive’ talks in Baghdad … on normalizing bilateral relations.”
On Aug. 22, the Iranian Foreign Ministry said “talks with Saudi Arabia over resuming ties are also going in a positive direction”.
Also in August, the UAE Foreign Ministry said that the return of its ambassador to Iran was part of efforts “to achieve the common interests of the two countries and the wider region”. The foreign ministers of the two nations held a phone call the week before in which they discussed “boosting bilateral relations and areas of cooperation for the benefit of both countries”.
At the same time, Kuwait announced the appointment of its ambassador to Iran.
The series of recent moves — including the 2021 signing of a 25-year strategic and economic partnership with China that is worth $400 billion, last month’s opening of embassies in Tehran by the UAE and Kuwait, and this week’s ascension to full membership in SCO — indicate that, even if negotiations to restart the Iran nuclear deal fall through and Western sanctions remain in place, the isolation of Iran may be over.
