Industrial Exporters Face Challenges in Iraq
Economy, Domestic Economy

Industrial Exporters Face Challenges in Iraq

For Iranian businesses, Iraq is a huge market.
In recent years, sanctions imposed over Iran’s nuclear program posed a major obstacle to Iranian industries both in domestic and foreign markets.
In 2014, Iran exported only $12 billion worth of consumer goods and construction services to the neighboring country. Industrial exports, however, held a meager share of the exports.
However, now that the restrictions are gone thanks to the July nuclear deal between Tehran and world powers, Iran’s industrial firms are hoping to thrive at home while expanding their presence in the Iraqi market.
That said, there are major hurdles that need to be resolved, the commercial manager of MFS, a company active in designing and manufacturing mechanical and process equipment, wrote in an article printed in our sister publication, the weekly Persian magazine Tejarat-e Farda.
According to Tarlan Jahani, lack of information about Iraq’s economy on the part of Iranian exporters is a major issue.
“The available information are scattered and in the form of news and case reports, which happen to be outdated at times. They are mostly focused on consumer goods such as food, apparel and nuts, which are used by traders and not industrialists,” he said.
Industrialists need to be regularly updated about information and data on Iraq’s industrial sector, ministries, organizations, industrial units, contractors, projects and common purchase and tender methods; latest regulations on how to open representative offices and local branches; banking and investment regulations; judicial laws and a comprehensive list of experienced Iraqi attorneys.
“Firms often run into problems and incur substantial losses before they are able to form an accurate picture about a particular sector in Iraq’s economy,” Jahani said.
In fact, there are no Iranian general or EPC (Engineering, Procurement and Construction) contractors in Iraq to win and manage projects, and pave the way for industrial exports to the neighboring country.
This is while China, South Korea, Italy, Turkey and the UAE have been drawing on major contractors’ expertise to supply Iraq’s oil and gas, construction, wastewater and power projects with the required goods and equipment.
British oil and gas construction, procurement and engineering firm Petrofac, Italian oil giant Eni, South Korean Samsung’s construction subsidiary, Kuwait’s oil firm Kuwait Energy, French energy firm Technip, Russian oil and gas firm Gazprom, Turkish energy company Calik Energy and construction conglomerate Enka, are among major international contractors operating in Iraq despite security issues facing the country.
Jahani called on Iran’s industrial exporters to consider all standards, including those concerning risk management, productivity, safety and environment to be able to compete with international players in the Iraqi market.
A few months back, during a visit by Iran’s Minister of Economy and Finance Ali Tayyebnia to Iraq, Tehran and Baghdad agreed to increase bilateral trade to $25 billion in the coming years.
Boosting industrial exports could be the key to fulfilling this ambitious goal.

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