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Trade With Iran Looking East
23 Jun 2016
Earlier this week, the Japanese ambassador, Hiroyasu Kobayashi, announced that his country will be sending a high-ranking trade delegation to Tehran in a bid to re-establish previous productive economic relations with the Islamic Republic. This seems to be yet another example of a significant dominant economy seeking to build ties and do business in Iran.
Japan’s Ambassador was in a meeting with an Azerbaijani Governor when he referred to the number of Memoranda of Understanding that have already been signed between Tehran and Tokyo in the preceding eight months . It seems that major Japanese companies in Tehran have also increased their staff numbers significantly too, by up to a third.
The completion of baseline documentation, together with the “ … opening of a $10 billion credit line are very promising for the implementation of big project in this country,” Ambassador Kobayashi said.
The first joint economic MoU was signed in February according to Mehr News. Iran’s Economy and Financial Affairs Minister, Ali Tayyebnia and Japan’s Foreign Minister, Fumio Kishida came together to reach an agreement on the $10 billion investment credit which will finance Iran’s infrastructure projects and develop the capacity for further foreign investment.
Speaking at the sixtieth session of Government and Private Sector Dialogue Council recently, Ali Tayyebnia was reported at saying that the prime concern of Iran’s government and President Rouhani is to “resolve economic problems, particularly in the small and medium enterprises and industries”. This is great news for Iranian companies looking to expand right now.
Tayyebnia also mentioned the fact that Iran has managed to maintain a downward trend in inflation, which will help businesses and the people of Iran generally and expressed confidence that the country is “…certain to achieve five percent growth this year.” For business owners outside the oil sector, they can take some comfort that Tehran is looking to the future in terms of diversifying industry. The Minister expressed concern about “…relying on increased oil exports, it won't lead to inclusive and sustainable growth and the general public will not feel its effects.”
Tayyebnia spoke on behalf of the government in saying that Tehran’s leadership are “…seeking to achieve inclusive and sustainable growth.” He said that he expects Iran to come out of recession completely with the widening investments the White Rose Group have recently been reporting on. Small industries as much as larger Iranian companies should soon be able to feel the impact of growth.
MehrNews recently reported that plans agreed with Moscow have increased the value of trade between Russia and Iran by 69% in the first six months of this year compared to this period in 2015. Minister Mohammad Reza Namatzadeh said thisincrease in the value of economic between the two powers is likely to benefit various sectors.
Iran is continuing to look East to build trade links with emerging powers too. On June 14th, a senior Thai official in Thailand’s Ministry of Industry said that Iran is being looked to as a new potential market for Thai companies’ consumer goods exports. Ms. Anong Paijitprapapon, Deputy Director General of Department of Industry Promotion of Thailand Ministry of Industry, was interviewed by Parnaz Talebi for MehrNews about Tehran-Bangkok trade ties and import and export business opportunities between the two partners. The full details can be found in that publication, however, the following is some of the information we think our readers will find of interest.
Current Iran-Thailand Economic and Industrial Ties
Statistics for May 2015-April 2016, from Thailand's Ministry of Commerce, show that Thailand has exported approximately USD 201 million’s worth of products to Iran. Iranian exports to Thailand were valued around USD 81 million.
Thailand’s top 10 products they currently export to Iran include:
- wood and wood products
- rubber and associated products
- canned and processed fruits
- batteries and battery parts
- cars and automotive parts
- shoes and shoe parts
In return, Iranian exports include:
- steel and products
- plants and plant products
- fresh, chilled, frozen, processed, semi-processed aquatic animals
- fruits and vegetables,
- medical and pharmaceutical products
- textile products
- cars and automotive parts
Iranian-Thai trade is expected to continuously grow and the Thai Minister referred to her country’s aspirations to build on existing trade capacity. The Ministry of Industry in Thailand recognise Iran’s potential and, she said, will “…thus will play a vital role in promoting relevant activities to support the national policy.”
The evidence is mounting that Iranian companies need to seize this moment and stay ahead of the curve. It is always those companies willing to move first who get the biggest chunk of the best deals. Any business owners needing advice on expanding overseas trade with Iran can offer the best business support services, with offices in key locations around Iran to speed up logistics. Please get in touch to ask us any of your questions.
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