Growth in Trade Ties With Iraq

EghtesadOnline: Iran’s exports to Iraq hit 28 million tons worth $8.22 billion in the first 11 months of the current fiscal year (March 21-Feb. 19), registering a 17% and 20% year-on-year growth in terms of weight and value respectively, according to the spokesman of the Islamic Republic of Iran Customs Administration.

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13 March 2022

The exports to Iraq accounted for 25% of the weight and 19% of the value of Iran’s total exports, which stood at 112.66 million tons worth $43.52 billion during the period.

The exported goods mainly included seafood, livestock, dairy, agrifood products, industrial machinery, minerals and construction materials.

“Iran’s exports to Iraq grew significantly from $145 million in the fiscal 2001-2 to $9 billion in the fiscal 2019-20,” Rouhollah Latifi was also quoted as saying by IRNA, adding that this year’s shipments are also expected to reach $9 billion.

Iran’s imports from the neighboring country stood at 2.2 million tons worth $1 billion during March 21, 2021-Feb. 19.

“The import volume [tonnage] is higher than total imports during the last 20 years,” Latifi said.

“Total imports from Iraq during the two decades to March 2021 stood at 1.31 million tons of goods worth $1.33 billion.”

This year’s imports from Iraq mainly included essential goods, including wheat, field corn, soymeal, barley, unrefined vegetable oils and sugar.

Kermanshah in western Iran shares around 371 kilometers of common borders with Iraq and the Kurdistan Region.

The province accounts for around half of Iran’s annual non-oil exports to Iraq.

Baghdad to Host First Joint Investment Forum

The first Iran-Iraq Investment Forum is scheduled to be held in Baghdad concurrent with Iraq’s Investment Opportunity Exhibition from March 28 to 31, according to a deputy economy minister.

“Iran’s Economy Minister Ehsan Khandouzi and his Iraqi counterpart Ali Allawi will be attending the forum with 1,000 businesspeople and economic players from the two sides,” Ali Fekri was also quoted as saying by IRNA.

During the exhibition, added Fekri, who doubles as the head of the Organization for Investment, Economic and Technical Assistance of Iran, Iraqi investors and the advantages of Iran’s investment regulations will be introduced, investors from the two countries will have the chance to become familiar with each other’s activities, successful investment projects in Iran will be reviewed and Iraq’s market and investment opportunities will be surveyed.

“Among other objectives of the forum are introducing Iranian knowledge-based businesses and opportunities for production in Iran or Iraq, showcasing the latest technologies, equipment, machinery and services that Iranians can offer Iraqi businesses and going over projects and investment opportunities in the two countries,” he said.

Fekri added that apart from Iraq and Iran, Turkey, the UAE, Egypt, and Saudi Arabia are also taking part in the four-day event which is to be held in Baghdad International Exhibition Center.

Railroad Connection

Iran and Iraq have agreed to build a railroad connecting both countries, for which Iran’s Minister of Roads and Urban Development Rostam Qasemi signed an agreement with his Iraqi counterpart for the implementation of Basra-Shalamcheh railroad.

The Islamic Republic of Iran Railways and Iraqi Republic Railways plan to establish a joint venture to complete the project within two months, IRIB News reported.

The project would connect Basra in southern Iraq to Shalamcheh in western Iran. There are only around 30 kilometers (18 miles) between the two areas. The railroad would be strategically important for Iran, linking the country to the Mediterranean Sea via Iraq and Syria’s railroads.

According to Al-Monitor, though, this is not the first time Iraqi and Iranian officials have promised to build the railroad.

The Islamic Republic of Iran Railways revealed details of a plan to connect Basra with Shalamcheh in 2018. Iraqi Prime Minister Mustafa al-Kadhimi and then-Iranian president, Hassan Rouhani, also pledged to move forward with the project last year.

Iraq’s Transportation Minister Hussein al-Shibli signed the agreement for the Iraqi side. The delegations also agreed to double the number of direct flights between their countries, according to Tasnim News Agency.

Iran and Iraq have close political and economic relations.

The 32-kilometer-long railroad will be funded by Iran's Mostazafan Foundation.

In May, former deputy minister of roads and urban development, Mahmoud Ghaffari, said an investment of €100 million is required to complete the project.

The Iraqi side failed to build the railroad from Shalamcheh to Basra due to economic problems and a shortage of funds.

The launch of the railroad boosts Iran's exports to Iraq and from this route to West Asian and North African countries.

In order to complete the Shalamcheh-Basra railroad, the 17-kilometer Khorramshahr-Shalamcheh railroad was completed in 2011 to connect Iranian railroads to the Iraqi city of Basra.

The project is aimed at facilitating the travel of Iranian pilgrims, especially during the annual Arbaeen pilgrimage season and travelers could use this rail link from Iran via Basra to Karbala and other holy cities of Iraq.

While Iraqi passenger and freight trains are using the rail link of Basra to Karbala, Iranian pilgrims have been travelling by train from Tehran to Shalamcheh and from there after a 32-km trip by bus to Basra and depart from Basra to Karbala by Iraqi train.

According to Al-Monitor, the railroad is part of Syria’s reconstruction deal for promoting religious tourism among Iran, Iraq and Syria. Syrian opposition parties, however, have rejected the railroad, believing it will entrench Iranian influence and help provide the logistic services necessary for its presence in Iraq and Syria.

Rouhani said the Shalamcheh-Basra railroad would connect Iran to Iraq, Syria and the Mediterranean, causing a fundamental change in the region.

"Iran's Khorramshahr, Abadan and Shalamcheh are located in a very important strategic area," he was quoted as saying by Mehr News Agency.

"Due to the agreement made with the Iraqi government on connecting Shalamcheh to Basra, we will be able to witness a fundamental change in this region."

"This will be a very big change and Iran's railroad will be connected to Iraq and Syria, and in fact to the Mediterranean, which is very important," he added.