4 reasons why Afghanistan and Iraq are main destination points for Iran’s exports

Posted on November 26, 2012


Since 2011, the international sanctions against Iran’s oil and gas sector have intensified. This led to Iran, as the country that heavily relies on oil exports, to review its policies, and pay more attention to its non-oil sector.

Iran has mostly been earning revenue via its oil exports. In order to maintain its imports, the country needed to keep the exports going, so the revenue money could be used on imports.

Comparing Iran’s overall export and import shows a positive trade balance, while if comparing the non-oil exports and imports, then the negative trade balance can be observed.

Iran plans to increase its non-oil exports, which currently stand at some $12 billion, up to some $20 billion per year.

In order to achieve that, Iran needs not only big investments, but also to increase the number of construction (railway, highways, roads) projects.

On Nov. 26, Iran’s Parliamentary Research Center released a report on imports and exports of Iran, Mehr reported.

The report said the exports to some countries should be increased, as there is high potential for trade between them. Afghanistan and Iraq were mentioned among those countries.

Due to religious commonalities with Iran, both Afghanistan and Iraq are currently very interested in importing Iranian goods.

Several months ago, head of Iran’s Trade Promotion Organization in Iraq, Faraz Gurbani Moghaddas said that the trade turnover between Iran and Iraq started to grow since 2004.

He noted that in 2004, the exports from Iran to Iraq reached some $300 million, while now this figure is well over $5 billion.

The statistics of exports from Iran show that during the last 10 years most of Iran’s non-oil exported goods went to Afghanistan.

Some five months ago, the U.S. government asked Afghanistan to sanction 24 Iranian companies that deal goods to Afghanistan. Up until this day, Afghanistan has not signed the necessary document in this case.

The main goods that Iran exports to Afghanistan and Iraq are the construction materials, carpets, foodstuffs, electronic goods, and some chemicals.

The Head of Trade of Organization of Iran’s South Khorasan province, Nader Mirshekar said that Iran currently exports over $1,2 billion worth of non-oil goods to Afghanistan, and that ten years ago this figure was some $100 million.

Considering that, official Afghan sources have said that the exports from Iran was even more than $1,2 billion, due to smuggling of goods.

Putting aside the official trade turnover between Iran and its neigbours, with smuggled goods, the statistics would look even more impressive.

Due to wars and conflicts in Iraq and Afghanistan, and also lack of necessary investments into local production, it shows that the potential of non-oil exports from Iran to these two countries could be much more than it is today.

By T. Jaffarov, S. Isayev