Iran exports commodities worth $4.7b to UAE in 9 months

Iran exported commodities valued at $4.7 billion to the UAE during the first nine months of the Iranian calendar (March 21-December 21, 2023), the head of the Islamic Republic of Iran Customs Administration (IRICA) announced.

News ID: ۸۱۸۱۵۷

06 January 2024

Mohammad Rezvani-Far said that the UAE was the third top export destination of Iranian goods in the mentioned nine-month period.

The IRICA head also announced that exporting goods worth $15 billion to Iran, the UAE was Iran’s first source of import in the first nine months of this year.

On September 10, 2023, the Financial Times reported that trade between Iran and the United Arab Emirates has increased significantly as Abu Dhabi eased restrictions on business activity between the two neighbors.

The UAE has eased some limitations on corporate registrations and the issuance of visas to companies from Iran in recent months, Financial Times reported, quoting business people and officials.

Iranian financiers are also exploring how to enhance bilateral trade by creating financial mechanisms to fund legitimate transactions, the report added quoting the sources.

The UAE is Iran’s second-largest trade partner. The trade between Iran and the UAE has recovered from a pandemic slump of $11 billion in 2020/2021 to $24 billion in the 12 months ending in March, according to Iranian data.

The trade between the two sides has surpassed the $22 billion recorded in 2012 before U.S.-led sanctions were imposed on the Iranian economy.

Iranian officials have said they are now targeting a further increase in bilateral trade towards $30 billion in the next two years.

“Pressure from the UAE central bank has decreased and some Emirati banks have started opening bank accounts,” said Masoud Daneshmand, a former head of the Iran-UAE Chamber of Commerce. “Currently, some Iranian companies that used to be in the UAE but had become inactive have become active again. Some new companies have also started business.”

In diplomatic exchanges, Iranian officials have been asking their Emirati counterparts to find new mechanisms for financing trade, according to people briefed on these conversations.

“Our economic relationship with Iran has long been of major importance,” said the UAE’s economy ministry. “The UAE’s trade with Iran is conducted in full compliance with global rules and standards.”

For years there have been self-imposed restrictions on business with Iran, but these have been gradually eased in recent years, a UAE-based businessman said. “There’s a sense of more openness.”

Iran and the United Arab Emirates have agreed to sign new memorandums of understanding (MOUs) on the avoidance of double taxation and facilitation of mutual investment.

The decision was made during a meeting between Iranian Minister of Finance and Economic Affairs Ehsan Khandouzi and UAE Minister of State for Financial Affairs Mohamed bin Hadi Al Hussaini on the sidelines of the annual meeting of the Islamic Development Bank (IsDB) Board of Executive Directors in Jeddah in mid-May, 2023.

During the meeting, the officials emphasized increasing cooperation in the fields of trade and foreign investment; in this regard, it was decided that appropriate measures should be implemented soon in order to sign agreements on facilitating foreign investment and avoidance of double taxation between the countries.

Pointing to the positive impact of the resumption of relations between the Islamic Republic of Iran and Saudi Arabia in the region, Al-Husseini said that the volume of trade between the two countries has increased about 40 times.

“This volume of trade in various fields indicates a natural and positive growth of relations and interactions between Iran and the UAE, and the role of the governments of the two sides is to encourage trade and facilitate it through agreements to avoid double taxation, and it is necessary to revise the existing agreements between the two countries,” he said.

Khandouzi for his part referred to the previous unfinished negotiations related to the drafting of a foreign investment agreement between the two sides, saying: “The Islamic Republic of Iran is ready to cooperate in joint profitable projects, as well as cooperation for investing in other countries.”

Also on May 9, 2023, the head of the Federation of Chambers of Commerce and Industry of the United Arab Emirates said his country is seeking to become Iran’s top trading partner in the region.

Abdullah Mohamed Al Mazrouei, who visited Iran at the head of a business delegation, made the remarks in a meeting with the former Head of Iran Chamber of Commerce, Industries, Mines, and Agriculture (ICCIMA) Gholam-Hossein Shafeie in Tehran.

During the meeting, the two sides exchanged views on the common fields of cooperation, economic relations, and how to expand commercial relations between the private sectors of Iran and the UAE.

Stating that the UAE is one of the most important neighboring countries of Iran with a deep historical relationship, Shafeie said: “The UAE is Iran's second trading partner in the world after China, and the volume of our annual exchanges has reached about 24 billion dollars. Despite all the restrictions of the past and the heavy shadow of political issues on economic relations, the UAE has always maintained its good position in relation to Iran and the mentioned issues have not been able to have a deep impact on our business relations.”

Back in early January, 2023, the director-general of Bushehr Province’s Ports and Maritime Department announced that Iran has launched a direct container shipping line from the country’s southwestern Bushehr Port to the United Arab Emirates’ Port of Jebel Ali.

According to Mohammad Shakibi-Nasab, launching the mentioned shipping line is going to boost the economic exchanges between the two countries.

He further noted that with the new line going operational the cost of transporting export cargoes has also been reduced for the two sides’ traders.

At the same time, the head of Iran’s Ports and Maritime Organization (PMO) met with the UAE’s ambassador to Tehran, during which the two sides stressed the acceleration of mutual port, maritime, and transit cooperation.

In the meeting, UAE Ambassador Saif Mohamed Obaid Jasem Al Zaabi underlined the capacities of UAE companies for port and maritime investment in neighboring countries, especially Iran, and announced a field visit by his country’s experts to Iranian ports in the near future.

The Arab official also referred to the very good transportation and transit infrastructure in his country and welcomed Iran's approach to developing transit cooperation with CIS countries.

Al Zaabi emphasized the need for the expansion of economic relations between Tehran and Abu Dhabi, expressing the trust and interest of the UAE government in developing port and maritime cooperation with Iran.

PMO Head Ali-Akbar Safaei for his part stressed the strategy of the Iranian government to develop economic cooperation and good relations with neighboring countries, saying that the development of maritime relations between Iran and the United Arab Emirates is very important for the Islamic Republic.

Stating that Iran is ready for the development of maritime, transit, and port relations with Abu Dhabi, Safaei emphasized: “Transit and port connections between Tehran and Abu Dhabi with Central Asian countries and other nations can be formed quickly and prosper very fast.”

The official also welcomed any investment by UAE port and maritime companies in Iran’s southern ports, especially Shahid Rajaei Port and Chabahar Port.

"Chabahar Port has very good capacities and the private sector of the United Arab Emirates can forge long-term investment contracts in Chabahar port," he said. / MEHR