Amid harsh economic sanctions against Iran, the Islamic Republic's new trade strategy is to focus on exports to 15 neighboring countries in addition to China and India, which Caretaker of Trade Promotion Organization of Iran Mohammad Reza Modoudi refers to as "15+2".
“Since our country is under sanctions and transporting goods with ships is mired in difficulties, logic dictates that we seriously pursue exporting to neighboring countries and plan for it. This [strategy] will offset the negative effects of sanctions,” the official was quoted as saying by Iran newspaper, stressing that exports to India and China should be taken more seriously.
Iran has land or sea borders with 15 countries, namely the UAE, Iraq, Turkey, Afghanistan, Pakistan, Russia, Oman, Azerbaijan, Turkmenistan, Kuwait, Qatar, Kazakhstan, Armenia, Bahrain and Saudi Arabia.
Modoudi noted that Iran plans to boost exports to Bahrain and Saudi Arabia—the two countries whose commercial exchanges with Iran have been next to zero in recent years.
According to the official, plans have been made to increase Iran’s exports to neighboring states from $24 billion in the last fiscal year (ended March 20, 2019) to $48 billion within the next two years.
Referring to Iraq as Iran's top export destination among neighbors (and second biggest in the world after China), the TPO official said plans are underway to increase exports to Iraq from the current $9 billion per year to $18 billion in two years.
Iran is also Iraq's top trading partner Turkey and China.
Speaking to IRNA, Modoudi unveiled plans to send 15 commercial attachés to neighboring countries.
He noted that currently Iranian commercial attachés are serving in Armenia, Iraq, Afghanistan, Oman, Pakistan and Turkey, adding that more commercial attachés will be sent to Russia, China, India, Kazakhstan and Turkmenistan.
Neighbors' Share in Iran Trade
Iran traded 67.6 million tons of non-oil commodities worth $35.58 billion with its 15 neighboring countries in the last fiscal year to register a 9.71% and 7.29% decline in tonnage and value respectively compared with last year’s corresponding period.
Latest data released by the Islamic Republic of Iran Customs Administration show Iran’s exports totaled 59.06 million tons worth $24.06 billion last year, indicating a 0.07% decrease in tonnage and 0.03% increase in value year-on-year.
Imports stood at 8.54 million tons worth $11.52 billion, down 0.24% and 0.23% in tonnage and value respectively YOY.
A non-oil trade surplus of $12.54 billion was registered in favor of Iran during the period under review.
Iran mainly exported liquefied natural gas, gas condensates, low-density oils and mineral oils to the neighboring states.
In exchange, major commodities imported into Iran from the neighboring states included nuclear reactor parts, barley, field corn, rice, steam turbine parts and cellphones.
In terms of total trade value, the UAE topped the list among neighboring countries with Iran trade standing at 17.57 million tons worth $12.52 billion, down by 30.07% and 25.6% in tonnage and value respectively YOY.
Exports to the UAE amounted to 13.75 million tons worth $5.95 billion to register a 24.53% and 12.06% decline in tonnage and value respectively YOY.
The UAE was Iran’s second biggest export destination among the countries under review and third among all countries.
In return, the UAE exported 3.82 million tons of commodities worth $6.56 billion to Iran, down by 44.68% and 34.71% in tonnage and value respectively YOY.
The UAE was the top exporter of goods to Iran among the states and second in the world after China.
Major Iranian commodities exported to UAE were gas condensates, low-density oils and mineral oils.
The UAE mainly exported steam turbine parts, cellphones, butter and turbojet parts to Iran.
Highest Growths, Declines
Trade with Russia ($1.62 billion), Oman ($1.16 billion) and Iraq ($9.01 billion) registered the highest YOY growths of 59.13%, 51.16% and 35.75% respectively, while trade with Saudi Arabia ($360,397), Turkey ($4.98 billion) and Bahrain ($12,660) witnessed the lowest declines of 83.66%, 30.61% and 26.45% respectively.
Iran’s exports to Iraq ($8.96 billion), Pakistan ($1.24 billion) and Oman ($728.56 million) saw the highest growths of 36.71%, 35.77% and 32.07% respectively, while exports to Turkey ($2.36 billion), Kazakhstan ($131.4 million) and Armenia ($158.99 million) witnessed the highest declines 40.22%, 22.19% and 21.51% respectively.
Imports from Oman ($432.82 million), Russia ($1.34 billion) and Kazakhstan ($87.06 million) marked the highest growths of 99.75%, 84.52% and 30.46% respectively, while imports from Qatar ($9.54 million), Kuwait ($s12.16 million) and Afghanistan ($10.93 million) witnessed the highest declines of 59.9%, 55.73% and 46.41% respectively.
