Iran Apparel Imports Hinge on Domestic Production, Exports

Foreign representatives, branches and distributors of apparel in Iran seeking business licenses are required to produce goods worth 20% of their import value (in rial terms) inside Iran and at least 50% of this domestic production be exported, a new directive issued by the Ministry of Industries, Mining and Trade announced.

The licenses issued as per the above condition will be valid for two years, with the possibility of extension if there are no violations.

The new regulations, according to Mehr News Agency, are aimed at increasing domestic production, creating jobs and reviving Iran's aging apparel industry by importing up-to-date technology.

"One of the goals we have in mind is to turn Iran into an apparel exporting hub in the Middle East," the head of Tehran’s Union of Garment Manufacturers and Sellers, Abolqasem Shirazi, was quoted as saying.

Shirazi noted that domestic manufacturers of apparel have been hard hit by excessive imports in recent years.

According to the Headquarters to Combat Smuggling of Goods and Foreign Exchange, apparel tops the list of goods smuggled into Iran.

Some $2.6 billion worth of clothes are imported into Iran every year and according to members of apparel unions, twice this amount is smuggled into the country.

According to Director General of the Association of Iran Textile Industries Mohammad Mehdi Raeis-Zadeh, more than 90% of foreign brands sold in Iran are fake and only 25 to 30 brands have sales permits from the main companies and/or their representatives.

The Iranian apparel market is worth an estimated $12 billion per year.

Earlier this month, in an interview with Financial Tribune, President of Trade Promotion Organization of Iran Mojtaba Khostrotaj said foreign apparel producers and distributors must have registered official representatives and obtain the licenses before they can export their products into Iran.

“As of this moment, we do not give permission for importing clothes because we have not registered any official representatives,” he said at a press conference on May 1.