Iran’s trade with Shanghai Cooperation Organization’s member states, excluding crude oil exports from the country, stood at 52.71 million tons worth $40.98 billion in fiscal 2022-23 (ended March 20), indicating a 3.91% fall in terms of weight, but a 10.26% rise in value compared with last year’s corresponding period, latest data released by the Islamic Republic of Iran Customs Administration show.
China with 35.55 million tons worth $30.32 billion was Iran’s main trade partner among SCO member states during the period. It was followed by India with 7.3 million tons worth $4.99 billion and Russia with 4.04 million tons worth $2.32 billion.
Iranian exports hit 42.71 million tons worth $19.68 billion in the year under review, registering 5.81% and 4.43% drops in weight and value respectively.
China with 31.15 million tons worth $14.58 billion (up 1.84%), India with 5.42 million tons worth $2.14 billion (up 16.62%) and Pakistan with 3.53 million tons worth $1.48 million (up 18.1%) were the main export destinations.
Imports stood at 10 million tons worth $21.29 billion during the period, registering 5.19% and 28.52% rises in weight and value respectively.
China with 4.4 million tons worth $15.74 billion (up 23.57%), India with 1.87 million tons worth $2.84 billion (up 80.35%) and Russia with 2.62 million tons worth $1.57 billion (down 5.59%) were major exporters.
Iran signed a memorandum on Sept. 16, 2022, during a summit in Samarkand, Uzbekistan, for joining the security bloc, the largest regional body in the world in terms of population.
SCO was established in Shanghai in 2001 by China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan, and was joined by India and Pakistan in 2017.
Commenting on the progress in Iran’s as well as Belarus’ accession to the Shanghai Cooperation Organization, SCO Secretary-General Zhang Ming recently said, "I completed my visit to Iran and arrived in Belarus. Both countries have had the observer status in our organization for many years. All these years, they have been actively involved in all events related to the activities of SCO. They applied for full membership in the organization. These applications were actively supported by the heads of SCO member states,” BelTA reported on March 10.
According to Zhang, the procedure for Iran's accession to the SCO was okayed in Dushanbe, Tajikistan, in 2021, and Belarus got the green-light in Samarkand in 2022.
“At present, the two countries, member states and the SCO Secretariat are doing everything in their power and working closely to advance this process. In particular, this concerns the legal formalization of certain procedures both within the organization and in these states. Things are moving along nicely," he said.
Asian Multilateralism
Helping the country protect its core interest amid the US-led sanctions that have crippled its economy, Iran’s accession to Shanghai Cooperation Organization demonstrates Tehran’s commitment to Asian multilateralism, Asian News International wrote citing the Policy Research Group.
“The SCO accession is seen as a positive step forward for Iran, rather than a diplomatic triumph for the country which has long been battered by Western sanctions giving a blow to its economy. Iran can lead the way in emerging as a key partner for India and other Asian nations, especially through the International North-South Transportation Corridor,” it said.
Beginning with only six members in 2001, the SCO eventually grew to a limited membership of eight when India and Pakistan joined in 2017. Iran is being welcomed as only the ninth member of the organization, though many more are now in line. Membership will grant Tehran top level contacts and economic cooperation with Russia, China, India, Pakistan, and several Central Asian countries — nearly half the population of the world, making up 28% of the global GDP.
“Sanctions disrupted the trade patterns, but Iran’s response to the US maximum pressure has been to focus on its immediate neighbors as well as on Eastern powers. The policy is primarily driven by security as well as economic imperatives. A full SCO membership will further facilitate Iran’s trade with Asian powers and Russia, compensating for the decline in trade with the EU that has decreased due to US sanctions,” Vienna-based strategy consultant Bijan Khajehpour told Responsible Statecraft.
The Shanghai Cooperation Organization is a Eurasian political, economic and security organization. In terms of geographical scope and population, it is the world's largest regional organization, covering approximately 60% of the area of Eurasia, 40% of the world population and 30% of global GDP.
“Iran’s accession to the Shanghai Cooperation Organization is a watershed event for diplomacy, which can open up new frontiers for the country’s economy as well,” says Mohammad Lahouti, the head of Iran Export Confederation.
“A good opportunity has been provided for the country to shift its economic approach to focus on the development of foreign trade with these countries and boost its economic cooperation with the members of Shanghai Pact. In doing so, the country will be bound to contribute to the 25% GDP of the world and increase its role on the economic front,” he was quoted as saying by the Persian economic daily Donya-e-Eqtesad.
“Iran has unparalleled capacities through which cooperation with SCO members can be facilitated. The country is located on corridors extending from north to south and west to east; Iran remains the most important corridor to cross West Asian region, although many countries tried to somehow replace it over these years. According to statistics, the country has one of the largest oil and gas reserves in the world, which are needed by China and India, two key members of SCO.”
