Iran exported $800 million worth of commodities to Russia in 2020 to register a 105% increase compared with 2019.
The volume of exports, according to Iran’s Ambassador to Russia Kazem Jalali, is a record high in the two neighbors’ bilateral trade.
“The increase in exports came despite the outbreak of Covid-19 last year as well as the intensification of the unilaterally imposed US sanctions on Iran’s economy,” Jalali was also quoted as saying by IRNA.
Among the reasons for the rise in exports over the period, the envoy explained, is the preferential trade agreement between Iran and the Eurasian Economic Union, which came into effect in October 2019.
Iran and the Eurasian Economic Union – comprisng Russia, Kazakhstan, Armenia, Belarus and Kyrgyzstan – signed a three-year provisional agreement in Astana, Kazakhstan, on May 17, 2018, for the bloc to welcome Iran into EEU.
The arrangement, which lowers or abolishes customs duties, is the first step toward implementing free trade between Iran and the five members of the union. Key objectives of EEU include increasing cooperation and economic competitiveness for member states, and promoting sustainable development to raise their standards of living.
The average tariff set by EEU on Iranian goods as part of a preferential trade agreement stands at 3.1%, while the figure is 12.9% for EEU goods exported to Iran.
The two sides have listed 862 commodities in their three-year provisional trade agreement. As per the deal, Iran will enjoy easier export terms and lower customs duties on 502 items and the same goes for 360 items from EEU member states.
“Iran’s Embassy in the Russian Federation has recently focused on bilateral economic and commercial ties. Iran and Russia have had high cooperation in security and military affairs for years. Yet less has been done in the field of trade over the years. This is while there is ample potential to boost mutual commerce with proper planning, and do away with restrictions,” Jalili said.
“Russia’s annual imports stand at about $250 billion and Iran has the capacity to get hold of a much larger share in the neighboring country’s market.”
Iran’s main exports to Russia include fruit, pistachio, dates, fig, raisin, shrimp, plastic products, chemicals and carpet.
Noting that Iran has the potential to expand the list of its exports to Russia, the ambassador said, “Yet, we face some limitations here. Our transportation infrastructure, including road, rail and marine routes, is not adequate. There’s a shortage of container vessels ... We are facing banking and transaction restrictions, and many of our traders are not familiar with Russian trade regulations or the Russian language.”
According to Jalili, total Iran-Russia trade in 2020 hit $2.22 billion, indicating a 40% rise compared with $1.59 billion in 2019.