Campaign to Support Iranian Apparel Threatened by Contraband

EghtesadOnline: The promotion of domestic apparel is tied with preparing the cultural ground among consumers. In addition, offering good clothing quality and variety is indispensable to build trust.

News ID: ۷۷۷۱۸۳

23 June 2017

These issues came to the fore, as Tehran Apparel Producers and Sellers Union recently launched a campaign called “I Proudly Wear Iranian Clothes” to support the production of Iranian clothing.

“As long as we don’t trust Iranian clothes, we can’t expect a qualitative improvement in the apparel market,” Majid Talimi, a member of the union and head of the campaign, has been quoted as saying by the Persian daily Shahrvand.

Abolqasem Shirazi, the head of the union, believes the apparel industry needs the support of the government and the parliament, Finqancial Tribune reported.

“Currently, producers have to pay 30% of the salary of each new worker they hire as insurance premium—a heavy burden in the early years of small businesses. The parliament can change the rules to grant small- and medium-sized workshops incentives such as a three-year exemption,” he suggested.

Talimi invited all apparel sellers, designers, etc. to join this campaign to support domestic production and help the sector grow. He explained that the philosophy behind this plan is not to eliminate foreign apparel in the market because doing so would eliminate competition.

According to the head of Majlis Education Commission Mohammad Mehdi Zahedi, the Iranian apparel market is worth $15 billion.

He said figures pertaining to the share of imported apparel in the Iranian market fluctuate between 30% and 65%, adding that 90% of all the apparel shipped into the country are contraband.

According to the Islamic Republic of Iran Customs Administration, official imports stand between $50 and $60 million per year.

According to Ahmad Kimiaei-Asadi, a member of Tehran Chamber of Commerce, Industries, Mines and Agriculture, smuggling amounts to $1 billion per year.

According to the Headquarters to Combat Smuggling of Goods and Foreign Exchange, apparel tops the list of goods smuggled into Iran.

In a bid to tackle the staggering rate of smuggling in the apparel market, the Islamic Republic of Iran Customs Administration recently banned any commercial import of clothing by individuals.

The administration issued a directive late last Iranian year (March 2016-17), based on which the import of clothing is only possible by companies and authorized representatives registered at the Industries, Mining and Trade Ministry.

In addition, the ministry has mandated foreign representatives, branches and distributors of apparel in Iran seeking business licenses to produce goods worth 20% of their import value (in rial terms) inside Iran and to export at least 50% of this domestic production.

The initiative is aimed at increasing domestic production, creating jobs and reviving Iran’s aging apparel industry.

Kimiaei-Asadi noted that the Iranian industry’s equipment have become dilapidated as a result of years of international sanctions against Iran’s economy over its nuclear program.

“We should bring modern facilities into the textile industry to develop domestic production and produce for all tastes. To undertake modernization, we need the support of government and private sector more than anything else,” he added.

According to the Central Bank of Iran, clothing had a 4.5% share in the total Iranian family basket in the fiscal 2015-16. In other words, each Iranian family spent an average of 15,897,000 rials ($423) annually on clothes. This is while each Iranian family’s expense for the whole year stood at 352,650,000 ($9,406) on average.