Iran’s trade with India fell by 19.67% during the first four months of 2023 compared with the same period of last year to stand at $702 million, latest data released by the Indian Ministry of Commerce and Industry show.
Iran’s exports stood at $257 million during the period, registering a 5.32% year-on-year growth.
The exported goods mainly included petroleum products worth $95 million, dye intermediates worth $63 million and fresh fruit worth $57 million.
Iran’s imports from India during the period stood at $445 million, registering a year-on-year fall of 29.36%.
The imports mainly included rice worth $295 million, fresh fruit worth $19 million, tea worth $14 million and organic chemicals worth $12 million.
Bilateral trade grew around 48% in 2022 compared with the year before to stand at $2.5 billion with Iran’s exports standing at $653 million, registering a 59.57% rise compared with the previous year. Iran’s imports from India stood at $1.84 billion last year, registering a year-on-year rise of 43.86%.
Economic Relations and Geopolitical Hurdles
Iran and India have historically maintained friendly and cooperative relations, and as the world moves toward a multipolar order, the two countries are poised to play a crucial role in shaping the new trade and connectivity patterns across Eurasia, Emil Avdaliani, a professor of international relations at the European University in Tbilisi, Georgia, and a scholar on the Silk Road, said in an article. Excerpts published by India Briefing follow:
Geopolitical developments in the region, such as the reimposition of US sanctions on Iran, have had a significant impact on Iran-India economic ties. Despite these challenges, both countries are actively exploring ways to boost their trade and investment relations, which could have a significant impact on the economic landscape of the region.
The development of Chabahar Port is among the main pivots of Iran-India cooperation.
In 2021, India exported goods worth $1.28 billion to Iran, primarily consisting of rice ($662 million), tea ($96.8 million) and bananas ($46.1 million). Iran, on the other hand, exported goods worth $379 million to India, with the major items being nuts ($100 million), ammonia ($58.2 million), and apples and pears ($48.3 million).
Additionally, Iran also exported small quantities of products such as methanol, toluene, dates, crude oil, liquefied butane and propane, bitumen, mineral base oil, stone and mineral salts.
Between 1995 and 2021, Iran’s exports to India have been on a declining trajectory, with an average annual decrease of 1.08% from $502 million to $379 million during the period. Indian exports to Iran have also been on a similar declining trend, with a decrease in value from INR10.57 billion in January 2023 to INR7.88 billion in February 2023.
The decreasing trend in trade between Iran and India has had a negative impact on their bilateral commerce.
In FY2022, India-Iran trade amounted to $1.91 billion, registering a drop of around 9% compared to total trade value of $2.10 billion in FY 2021. Furthermore, a closer analysis of long-term trade trends reveals an even more significant decline, as trade between Iran and India had reached $18 billion before the US withdrawal from the Joint Comprehensive Plan of Action. However, the reimposition of US sanctions on Iran led to India prioritizing its relationship with the US, causing economic and investment ties with Iran to stagnate.
