Iran’s trade with its 15 neighboring countries stood at 5.52 million tons worth $3.14 billion during the first month of the current fiscal year (March 21-April 20), according to the latest data released by the Islamic Republic of Iran’s Customs Administration.
The UAE was Iran’s biggest trade partner with 1.67 million tons worth $1.45 billion. It was followed by Turkey with 577,988 tons worth $633.38 billion and Iraq with 1.42 million tons worth $436.61 million.
Total exports to neighbors stood at 4.23 million tons worth $1.84 billion during the month.
The UAE with 1 million tons worth $667.59 billion was the biggest export destination. It was followed by Iraq with 1.42 million tons worth $426.36 billion, Turkey with 386,000 tons worth $361.09, Afghanistan with 248,344 million tons worth $108.44 million and Oman with 176,203 tons worth $74.39 million.
Total imports from neighboring countries during the period hit 1.29 million tons worth $1.29 billion.
Shipments mainly came from the UAE with 679,142 tons worth $778.38 million, Turkey with 191,987 tons worth $272.3 million, Russia with 242,734 tons worth $107.69 million, Iraq with 70,688 tons worth $60.2 million and Oman with 41,327 tons worth $36.77 million.
Iran’s 15 neighboring countries are Iraq, Turkey, Afghanistan, Pakistan, Russia, Oman, Azerbaijan, Turkmenistan, Kuwait, Qatar, Kazakhstan, Armenia, the UAE, Bahrain and Saudi Arabia.
Iran traded $36.45 billion worth of non-oil goods with neighboring countries in the last Iranian year (ended March 20, 2022) while the preceding year’s figure stood at $40 billion.
Neighbors account for about half of Iran’s total international trade.
UAE: Iran’s Major Trade Partner
The UAE is one of Iran’s biggest trading partners.
“Despite the significance of the UAE in Iran’s foreign trade, the two countries have yet to sign an agreement to avail themselves of preferential trade tariffs,” says Farshid Farzanegan, former chairman of Iran-UAE Chamber of Commerce.
“Due to geographical locations, cultural, trade and historical relations between Iran and the UAE, as well as the volume of annual imports, the country offers a golden opportunity for Iranian economic players,” he was quoted as saying by Fars News Agency.
“In 2019, the UAE’s exports stood at $248 billion while its imports hit $235 billion and as the world’s 24th largest exporter and 22nd largest importer, it has a significant position in the international economy and global value chains.”
According to Farzanegan, the UAE’s average trade volume with Iran since the fiscal 2010-11 stands at $16 billion. From the fiscal 2010-11 to fiscal 2018-19, the figure stands at $13 billion.
The average annual trade volume for the eight-year period stands at $13 billion with China, $5.5 billion with South Korea, $5.5 billion with Turkey and $5 billion with Iraq, indicating that the UAE has been the leading trade partner of Iran over the years.
According to Farzanegan, Iran’s major exports to the UAE are lead, cement, melon, grapes, vegetables and spice, with each Iranian product having an over 10% share in the Emirati market.
Noting that the most important hurdle in the way of trade between the two countries pertains to banking and money transfer, he said the ceiling for trade insurance coverage between the two sides is insufficient.
“It is not possible for traders to open letters of credit. Non-existence of consortiums for the export of technical and engineering services is another problem,” he said.
"This is while trade infrastructure in the UAE is very strong. Therefore, we must upgrade and develop our infrastructure accordingly to develop trade relations with this country.”
Farzanegan noted that Iran’s geopolitical and geo-economic advantages allow for transport of goods from Turkey and CIS states to the UAE.
The UAE-Turkey transit corridor through Iran became operational with the first shipment from the UAE port of Sharjah en route to the Turkish port of Mersin docking at the Iranian Shahid Rajaee Port in November 2021 before reaching Turkey through the Bazargan border crossing in northwest Iran.
Mohammad Hossein Rezaian, an expert in the field of transit, told Mehr News Agency that the consignment entered the port of Shahid Rajaee in southern Iran on the Persian Gulf from the UAE and reached the Turkish port of Mersin.
Rezaian noted that the new route shortens the former transit route by 12 days, meaning that it will take eight days for the shipments to reach Turkey's port through Iran from UAE's Sharjah while the previous route had to cross the Bab al-Mandeb Strait, the Red Sea and the Suez Canal and all the way to Turkey, which would take 20 days.
Noting that the UAE has zero tariff on imports of almost all types of commodities, except for Iranian cement with 5% tariff, Farzanegan said it is necessary for Iran to facilitate import from the UAE by establishing preferential tariffs.
Iran levies high tariff rates on imports, reaching as high as 40% on certain commodities.
“We have no preferential tariff agreement with any country. An agreement has been concluded with Turkey, negotiations have been held with Pakistan and during a recent visit of Minister of Industries, Mining and Trade Reza Fatemi-Amin to the UAE, negotiations were held to this end, but an agreement has yet to be reached.
An Iranian delegation led by Fatemi-Amin visited the UAE in February.
President of Iran Chamber of Commerce, Industries, Mines and Agriculture Gholamhossein Shafei and the head of Trade Promotion Organization of Iran, Alireza Peymanpak, also accompanied the visiting mission, who took part in a joint forum titled “Business and Investment Opportunities” on Feb. 8.
Iran’s first trade center licensed by Trade Promotion Organization of Iran was recently inaugurated in Dubai.
As Iran Chamber of Commerce, Industries, Mines and Agriculture reported, the establishment is aimed at helping Iranian companies find a foothold in the UAE, particularly Dubai that happens to be one of the main hubs of Iran’s trade in the region.
It also seeks to use advanced information technology to create a platform that facilitates business activities of Iranian firms in the Emirati market by providing technical advice and consultation services.
Growing Ties With Qatar Ahead of World Cup 2022
Saeed Mohammad, secretary of the Supreme Council of Free Trade and Special Economic Zones of Iran, says the Culture Heritage, Handicrafts and Tourism Ministry plans to host around 100,000 tourists for the World Cup 2022.
To make preparations for the big event, he added, the ministries of Culture Heritage, Handicrafts and Tourism; Roads and Urban Development; Sports and Youth Affairs; and Economic Affairs and Finance, in addition to the Ports and Maritime Organization, have joined forces.
Iran has announced that it will waive visa fees for spectators of the 2022 World Cup finals in a bid to attract some of the football fans flocking to nearby Qatar.
It has also been readying hotels and putting plans in place to boost flights.
“The Cabinet agreed to make visas free for the 2022 World Cup spectators in Qatar who wish to visit Iran,” tweeted the spokesman of the Iranian government, Ali Bahadori-Jahromi. “This decision aims to encourage tourists to visit Iran during the World Cup and boost the tourism industry there.”
Qatari Transport Minister Jassim bin Saif al-Sulaiti recently visited Iran's Kish Island and signed six cooperation agreements.
“One of the key agreements was a deal to increase flights between the two countries,” said Mohammad Mohammadi, the head of Iran's Civil Aviation Organization.
“Iran's contribution to the World Cup will be in the areas of air and sea transport and accommodation of foreign and Iranian passengers,” Iran’s Roads Minister Rostam Qasemi said.
“We also plan to offer foreign fans and tourists during their stay in Iran the opportunity to visit the country's tourist gems.”
To encourage travel, Iran's Culture Heritage Ministry had earlier said that visas could be waived for inbound visitors from Qatar during the two months of World Cup.
Visitors could apply for free single or multi-entry passes for 20 days during the period, the ministry said.
Kish Island, with an area of 92 square kilometers and a population of 42,000, is located in Bandar Lengeh County of Hormozgan Province, off the southern coast of Iran in the Persian Gulf.
The island has been declared the fourth tourist destination in Southwest Asia by the UNESCO Cultural Heritage List. It is among the most beautiful coral islands in the Persian Gulf.
The distance between Kish Island and Qatar is 270 km. Kish to Doha flight takes 40 minutes. The sea journey takes 5 to 6 hours.
The 2022 FIFA World Cup is the 22nd FIFA World Cup competition, contested by the national teams of the member associations of FIFA.
It is scheduled to take place in Qatar from Nov. 21 to Dec. 18, 2022. This will be the first World Cup ever to be held in the Middle East and the second World Cup held entirely in Asia after the 2002 tournament was held in South Korea and Japan.
Iran and Qatar have been forging stronger economic ties ever since a number of Arab states led by Saudi Arabia abruptly severed diplomatic relations with Doha in June 2017 and imposed a blockade on the Persian Gulf country, accusing it of supporting terrorist groups.
The Qatari government has denied the allegation as baseless, blasting the blockade as unjustified and a violation of international law. Following the development, Iranian exporters vied for the Qatari market in the absence of Doha's traditional Arab partners.
Qatar shares the world's largest natural gas field with Iran.
Qatar's Emir Sheikh Tamim bin Hamad Al-Thani met Iranian President Ebrahim Raisi in Tehran earlier this month.
The one-day visit by the emir came as the European Union's coordinator for nuclear talks, Enrique Mora, held a second day of meetings in Tehran with Iran's chief nuclear negotiator, Ali Baqeri, AFP reported.
Qatar, a close US ally, has added the Iran nuclear dispute to the list of diplomatic challenges where it has sought to play a behind-the-scenes mediatory role, and the emir has called for more dialogue to settle the standoff.
Washington unilaterally abandoned the nuclear deal in 2018 and reimposed sweeping economic sanctions. US President Joe Biden has said he wants the United States to return to the agreement but on-off talks on the mechanics have been stalled since March.
According to IRNA, ”unfreezing Iran's assets, cooperation in holding the 2022 World Cup, pursuing prisoner exchanges and cooperation in the field of energy" were also on the agenda of the emir's visit.
