Domestic Economy

Italy Vies to Become Iran’s Top Trading Partner

Italy Vies to Become  Iran’s Top Trading PartnerItaly Vies to Become  Iran’s Top Trading Partner

Italy plans to become Iran’s top trade partner and turn the Middle Eastern country into the world's eighth biggest automobile manufacturer by 2018, said the visiting Italian deputy minister for economic development.

Carlo Calenda made the statement at a conference dubbed "Iran-Italy Business Forum" in Tehran on Sunday.

The Italian official heading a 370-strong delegation, including representatives of 178 Italian companies, 20 associations and 12 banking groups, noted that agricultural machinery, mechanics and automation systems account for 60% of Italy’s exports to Iran, which are valued at €107.39 billion of Italy’s annual exports.

During the two-day economic mission, more than 700 meetings are scheduled to be held between the Italian and Iranian firms to enable cooperation on different fronts from joint investment to trade deals.

“Bilateral trade between the two countries stood at €7 billion in 2011 (before the imposition of sanctions) and it is our hope to see the figure rise to the same level in two years,” IRNA quoted him as saying.  

Calenda then praised Trade Promotion Organization of Iran and the Italian Trade Promotion Agency (known by its Italian acronym ICE) for their efforts to enhance economic relations between the two countries.

"Iran can act as the center of Italian traders’ activities to export commodities and services to the region," said Iran's Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh, adding that his country’s Foreign Investment Law guarantees and supports all investments and gives equal rights to both Iranian and foreigner investors.

“Iranian authorities believe that it is possible to have strong economic ties with all countries, including friends such as Italy,” he said.

The Iranian minister noted that “in spite of the fact that Iran boasts various industries such as petrochemicals, steel and automotive, its small-and medium-sized enterprises constitute 90% of the industrial sector", adding that it is important to tap into the potential of industrial associations and unions for further cooperation.

Nematzadeh also called on the two countries’ embassies to help expand bilateral transactions by easing visa requirements.

“This would generate motivation among industrial players,” he said.

Speaking in the conference, Guido Rosa, president of the Technical Committee for the Internationalization of ABI, said banking offices are vital to boosting trade between the two countries.

The Italian Banking Association is a voluntary non-profit organization and its purpose is to represent, look after and promote the interests of its member banks and financial intermediaries.

"Italy sees the Iranian market as a golden opportunity and seeks to expand its banking relations," he said.

"Banks are significant in supporting entrepreneurs and industrialists. Iran and Italy cannot reach objectives in the absence of a bilateral banking system, so representatives of 10 Italian and 24 Iranian banks will meet with their counterparts from the Central Bank of Iran on Monday to survey avenues of banking cooperation."

Iran ranks 18th among world economies and is located at the heart of the volatile Middle East, yet it is one of the safest countries in the world.

"Crude oil exports add up to more than 30% of trade exchanges with Italy," said Valliollah Afkhamirad, the head of Iran’s TPO, who was also present at the conference, adding that his organization is tasked with promoting bilateral trade and clearing hurdles in the way of Italian investments.

The participants wrapped up the conference by signing four memoranda of understanding in different sectors, including technology transfer, technical and scientific education, industrial marketing, leather industry, expansion of tourism, in addition to an economic MoU between the private sectors of the two countries.

> Fiat in Iran

Italy’s Fiat Automobiles has signaled its readiness to cooperate with an Iranian automaker.

Breaking the news on the sidelines of the conference, Nematzadeh said, "Iran intends to produce 3 million cars in 10 years and export one-third of them, so we are on the lookout for a notable partner. We will welcome Fiat’s investment in producing light, commercial and bifuel vehicles.”

> Reliable Partner

Italy can be a good partner for Iran, which is seeking reliable partners for joint investment and technology transfer, said the president of ICE, Riccardo Monti, prior to his visit to Iran.

ICE is an agency tasked with promoting Italy’s overseas trade.

“This delegation is the biggest Italian economic delegation, which goes to Iran. In recent months, Iran has made it clear that it does not seek to merely buy foreign products, rather it is trying to spot reliable partners for joint investment as well as transfer of technology for domestic production,” Monti said.

“Italian entrepreneurs are keen to return to a country of efficient entrepreneurs who are supported by the government’s hands-on approach.”

The Italian delegation is the fourth of its kind to visit Iran following the conclusion of July 14 nuclear deal better known as the Joint Comprehensive Plan of Action. The visit comes as sanctions against Iran are widely expected to be lifted by early 2016.

Italy had strong economic and trade relations with Iran and was Iran’s top trading partner in the European Union before the economic sanctions. But trade between the two countries shrank from €7 billion in 2011 to the current €1.6 billion.