Economy, Business And Markets

Foreign Firms Eager to Invest in Chabahar

Foreign Firms Eager to Invest in Chabahar
Foreign Firms Eager to Invest in Chabahar

Foreign firms especially from India have shown interest in investing in Chabahar Port, Secretary of Free Zones Coordination Council, Akbar Torkan, said on Monday.

“Appropriate infrastructure helps stimulate economic activities within the country’s eastern borders with the neighboring countries, and will be welcomed by foreign investors,” he was quoted by IRNA as saying.

He said that Chabahar’s strategic location has turned it into an “attractive destination” for domestic and foreign investors, and has made it “the most financially-sound corridor” that connects Afghanistan and central Asian countries to open waters.

Chabahar Port is nestled on the southeastern edge of Iran facing the Gulf of Oman and just touching the Indian Ocean. It is the most southerly port in the entire country.  

 The port, which was originally set up in partnership with India in the 1990s, has seen a steady increase in trade over the intervening years; however, the election of President Hassan Rouhani and his policies have further increased the port’s trade capacities during the past one and half year.

Turkan said that the Third Car Manufacturing Pole Project, which is to be based in Chabahar, will be soon launched, and added, “We have received lots of applications to take part in the project.  The final list of the investors, however, will be released soon.”

The ‘3rd Auto Manufacturing Pole’ refers to a plan offered by the government that seeks to improve competitiveness in Iran’s car-making industry, which is mainly dominated by two giants Iran Khodro and Saipa, through introduction of a third rival group.

Turkan said given that one of the Third-Pole-Project ‘s major goals is to increase export capacity, the company’s focus will be on producing high-quality products, of which 30% have to be made for export.”

He further said that the main goal of the project is to improve and encourage competitiveness in Iran’s car manufacturing industry.

Pointing to the tariffs Iran imposes on imported commodities, he said, “Iranian industrial products will fall short of the capacity to compete with the foreign products, should we remove tariffs on imported commodities.”

Iran applies customs duty on virtually all goods imported into the country.

Exemptions from customs and other duties are available for diplomatic goods, certain military equipment and supplies, and in cross-border trading.

Imports of consumer goods generally incur tariffs of 30–50%; capital and intermediate goods attract slightly lower rates. Medicines, wheat and “strategic” goods are zero-rated. Tariff rates and customs levies are subject to frequent change.

 In August 2001, for instance, the ministry of commerce imposed higher tariffs on steel imports to protect the Iranian national steel producers from cheaper imports from Kazakhstan, Russia and Ukraine. Tariff rates jumped to 50% (from 5%) on high-quality steel and to 10% (from 1%) on low-quality steel. The Iranian automotive industry is heavily protected, but the government has recently allowed imports—albeit with high tariffs.