Thailand’s Commerce Ministry expects trade and investment with Iran to jump sharply once sanctions against the country are lifted, said Thai deputy commerce minister.
Suvit Maesincee added that trade and investment between the two countries could reach $1.2 billion within two years of the lifting of sanctions, Thai newspaper Bangkok Post reported.
Trade between Thailand and Iran in 2015 amounted to $356 million, down from the typical $600 million, mainly due to low oil prices and the global economic slowdown.
“In four or five years, the figure could be up to $3 billion or even $5 billion,” Suvit said.
The sanctions on Iran are expected to be lifted soon as the country fulfils its promise to scale back its nuclear program.
The sanctions by the US and EU prohibit any cooperation in trade and financial services with Iran and include an oil embargo.
They also bar all Iranian banks, including the central bank, from the Society for Worldwide Interbank Financial Telecommunication—a major obstacle for doing business with Iranians.
Suvit called Iran a high-potential market with a strong and self-sufficient economy despite the sanctions.
“Iran is in a strategic location as a gateway to the Commonwealth of Independent States, with its combined population of 700 million,” he said.
The Thai government is promoting new markets such as India, Indonesia and Iran as part of measures to drive exports to 5% growth this year.
Suvit and Foreign Minister Don Pramudwinai will visit Iran next week to seek further collaboration on trade and investment, and set up a joint council with Iran’s commerce officials.
The trip will be joined by representatives of 50-60 Thai companies looking to set up a business matching event.
After the joint council has been set, Deputy Prime Minister Somkid Jatusripitak will visit Iran to negotiate a potential bilateral agreement.
Suvit said Iran’s geography forces it to import a high volume of food, especially rice, presenting an opportunity for Thai rice exporters.
Kriengkrai Thiennukul, vice chairman of the Federation of Thai Industries, said he saw high potential when he led 50 FTI members to a business matching event during his last visit to Iran.
“There are many Iranians interested in doing business with us and it’s a lot easier when the government is taking the lead,” Kriengkrai said.
He said Thai industrialists could export food, consumer goods, cars and tires to Iran.
Besides the sanctions, investors are still concerned about the payments issue, meaning most foreign transactions with Iran must be settled in Dubai.
“After the sanctions are lifted, it will take about six months for Iran to set up its payment and exchange system to ease trade,” Kriengkrai said.
