Domestic Economy

Moscow Urged to Do More to Facilitate Trade

Moscow Urged to Do More to Facilitate TradeMoscow Urged to Do More to Facilitate Trade

Expansion of trade between Iran and Russia was brought into the spotlight at a conference on trade and investment opportunities among Caspian Sea littoral states held in Tehran on September 12-13.

Head of trade representation at the Russian Embassy in Tehran, Andrey Luganskiy, top officials from Iran-Russia Chamber of Commerce, Tehran Chamber of Commerce, Industries, Mines and Agriculture, Export Guarantee Fund of Iran and a number of Iranian traders and businesspeople attended the two-day conference to seek ways of boosting economic relations.

The need for expansion of rail, sea and air transport routes to facilitate trade between Iran and Russia was repeatedly emphasized during the conference. Facilitating financial transactions, customs and diplomatic affairs were other central themes of the conference, IRNA reported.

Head of Tehran Chamber of Commerce, Industries, Mines and Agriculture, Masoud Khansari, urged Russia to grab the opportunities for economic cooperation with Iran following the implementation of the nuclear deal, warning that if the Russians do not act promptly, they could lose these opportunities to others.

Russia was part of the nuclear negotiations that led to the July 14 agreement between Iran and P5+1 group, namely the US, Russia, China, the UK, France and Germany. As part of the deal, economic sanctions imposed against Iran over its nuclear energy program are to be lifted.

Khansari also called on the Iranian government to pursue the development of North-South Transport Corridor to boost sea, road and rail freight transport among India, Russia, Iran, Europe and Central Asia.

Export of food products from Iran to Russia, cooperation in nuclear energy projects, collaborations in petrochemical production and joint oil extraction from the Caspian Sea were highlighted by the official as other potential areas for cooperation.

 Barriers to Bilateral Trade

Head of Iran-Russia Joint Chamber of Commerce, Asadollah Asgaroladi, referred to banking and monetary restrictions caused by sanctions as a major obstacle to Tehran-Moscow trade.

“Imposition of western sanctions against Russia [over Ukraine] has led to sharp fluctuations in ruble’s value, as a result of which Russian business-owners prefer to use ruble in their trade transactions. But despite many discussions on replacing the US dollar with the Russian ruble and Iranian rial in bilateral trade, the decision has not yet been finalized by Iranian and Russian officials,” said Asgaroladi.

“Moreover, Russian banks, still under pressure from the western sanctions against Iran, do not fully cooperate with Iranian traders.”

Asgaroladi proposed establishing direct flights between northern Iranian cities of Rasht, Tabriz and Mashhad to southern Russian cities of Astrakhan and Saratov to boost cargo transport.

The Iranian official criticized Moscow for imposing heavy tariffs on imports from Iran, noting that such tariffs range between 5-20%, while neighboring states of Russia, the Commonwealth of Independent States in particular, have import tariffs of 0-5%. He also called on Russian officials to facilitate the process of visa issuance for Iranian traders.

In 2005, Russia was the seventh largest trading partner of Iran, with 5.33% of all exports to Iran originating from Russia. Trade relations between the two countries reached a peak value of $3.7 billion in 2008,  but the tightening of sanctions against Iran toward the end of 2011 lowered bilateral trade. In 2014, commercial exchanges stood at about $1.7 billion.

Motor vehicles, fruits, vegetables, glass, textiles, plastics, chemicals, hand-woven carpets, stone and plaster products are among the main Iranian non-oil goods exported to Russia.