Iran's Non-Oil Foreign Trade Falls 8% to $49.5 Billion

EghtesadOnline: Iran's non-oil foreign trade (except for crude oil, mazut, kerosene and exports via suitcase) during the first seven months of the current Iranian year (March 21-Oct. 22) stood at $49.57 billion, indicating an 8.37% decline compared with last year's corresponding period, the Islamic Republic of Iran Customs Administration reported.

News ID: ۷۴۸۹۴۲

13 November 2019

Overall, Iran’s exports stood at 79.42 million tons worth $24.4 billion to register a 17.07% growth in weight but an 11.32% decrease in value year-on-year.

Imports hit 19.8 million tons worth $25.17 billion, indicating an increase of 3.07% in weight but a decline of 5.31% in value.

China, Iraq, the UAE, Turkey and Afghanistan were Iran’s main export destinations, Financial Tribune reported.

Exports to China stood at $6.1 billion, accounting for 24.99% of Iran's total exports.

Iraq imported $5.17 billion worth of non-oil goods from Iran to account for 21.2% of overall exports.

Exports to the UAE were at $2.78 billion, accounting for 11.41% of Iran’s total exports.

Turkey's imports from Iran were worth $2.67 billion, which constitute 10.95% of Iran’s total exports.

Exports to Afghanistan reached $1.28 billion. The neighbor to the east accounted for 5.26% of Iran’s total exports.

Top exporters to Iran during the seven months under review were China with $6.39 billion and a share of 25.42% from Iran’s total imports, the UAE with $4.58 billion and a share of 18.22%, Turkey with $3.03 billion and a share of 12.06%, India with $2.33 billion and a share of 9.28% and Germany with $1.2 billion and a share of 4.8%.

Iran’s non-oil foreign trade during the seventh Iranian month (ending Oct. 22) stood at $7.41 billion, indicating a year-on-year decline of 9.96%.

Exports amounted to 9.41 million tons worth $3.45 billion for the month while imports reached 3.23 million tons worth $3.95 billion to register a deficit of $493 million, according to the Persian economic daily Donya-e-Eqtesad.

Trade Measures in the Face of US Sanctions

The decline in trade comes, as last year the United States unilaterally walked out of the nuclear deal Iran had signed with world powers, including with the US, in 2015.

The US also reimposed a series of sanctions described as "toughest ever" against the Islamic Republic with the aim of choking off Iran's trade, particularly of oil, by obstructing banking transactions with the Islamic Republic and scaring off its trading partners.

The deal, better known as Joint Comprehensive Plan of Action, saw the removal of international sanctions against Iran. In exchange, the country agreed to limit the scope of its nuclear program.

The return of sanctions squeezed the Iranian economy after an initial boost as a result of JCPOA and its implementation in 2016. As a result, the Iranian government adopted ad-hoc trade policies to cushion the effect of sanctions.

One such measure was to ban imports of a wide range of goods as of last year with the primary aim of economizing foreign currency reserves. The measure especially pertains to commodities that are produced inside the country.

The list of banned imports recently got longer, as the government unfolds its latest foreign trade decision that added 120 goods to the previous list of 1,530.

The decision was made by the heads of the three branches of power in a recent meeting of the Supreme Council of Economic Coordination in response to a call by Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei.

On Nov. 3, the Leader addressed a gathering of university and high school students, in which he urged officials to institute policies to boost domestic production, Khamenei.ir reported.

“As for boosting production, one of the ways to boost production is by preventing the import of products produced inside the country. Why do they not prevent it? This is my serious question to the honorable officials! There are individuals who breathe with imports. Their life, their windfall wealth and their resources depend on imports. That is why they do not allow unnecessary imports to be prevented. Is it they or unemployed youth who come first? The country’s jobless youth stay unemployed with unnecessary imports that undermine domestic production,” he said.

Last year, the government banned the import of 1,339 items categorized as “Group Four”—products that are “non-essential” and have “counterparts made at home”—in a move to economize on foreign currency.

The Ministry of Industries, Mining and Trade has been tasked with identifying imports that are either unnecessary or those which local enterprises have the capability to produce, Deputy Industries Minister Hossein Modarres Khiyabani told Tasnim News Agency.

“The time is ripe for the manufacturing sector of the country to leap forward both in terms of quantity and quality, as resorting to imports is not justifiable due to the high exchange rate of the foreign currencies,” he added.

Industries Minister Reza Rahmani said imports will now be restricted to two groups of commodities: essential goods that are directly related to people’s food basket, in addition to raw materials, machinery parts and equipment needed by manufacturing enterprises.

Iran plans to localize the production of imported parts and equipment worth $10 billion by the end of the next fiscal year (March 2021).