The ban on the import of home appliances, first implemented around three years ago, has been extended and will remain valid at least until the end of the current Iranian year (March 2022), according to deputy minister of industries, mining and trade, Mehdi Sadeqi Niyaraki.
Noting that Iran’s home appliance industry needs close to 220 trillion rials ($797 million) in annual working capital to meet domestic demand, the official said domestic production rose by 40% in the last fiscal year (ended March 20, 2021), Mehr News Agency reported
Mohammad Hossein Eslamian, the deputy head of Home Appliance Sellers Association, told ILNA that imports can damage domestic production in areas where we have made progress, built capacity and set up production lines over the years, but in case of appliances where local production cannot meet domestic demand or lacks the required quality, it will be beneficial.
“There are certain household appliances for which there is domestic demand, but we don’t have the manufacturing ability. This demand does not vanish because local industries cannot supply it, so it is instead supplied by smuggling into the country,” he added.
Eslamian believes the ban on the import of these products needs to be lifted so the economy can benefit from legal import tariffs while meeting domestic demand.
“We have the option of importing spare parts. This way, we can fill in the technological gap and transfer technical know-how, increase product quality and reduce contraband in the market. This will also generate numerous job opportunities for our youth,” he added.
The official acknowledged that import bans are not permanent anywhere in a country’s industry and economy.
“If we want our home appliance industry to grow and find the capability to compete in both domestic and international markets, we have to prepare the grounds for it. One way to do this is to lift import bans so local industries feel the need to up their game, build the required infrastructure, acquire the latest technologies and improve their product quality,” he said.
According to the head of Iran’s Household Appliances Industry Union, Iran’s home appliance market is currently worth $6 billion per annum, 40% of which are dominated by contraband.
“Smuggled home appliances make up around $2.5 billion of the domestic market. The share of smaller items and kitchenware such as cutlery, crockery and crystal artifacts are higher, which has put the producers of these products in a hard place,” Alireza Mohammadi Daniali was also quoted as saying by the news portal of Tehran Chamber of Commerce, Industries, Mines and Agriculture.
Since past two years, he added, when the international giants of home appliances left Iran to flee the economic sanctions against the country and the repercussions that would plight them, local producers stepped in and filled the void.
Noting that smuggling is harming local businesses, Mohammadi urged the government to step in and support the domestic firms, given that on top of the contraband issue, producers are now dealing with the Covid-19 pandemic, consumers’ reduced purchasing power and a stagnant market.
“We are not saying that imports must be banned. What we want is for official imports to take place under the industrial strategic framework. The Iranian government, like all others across the globe, from the US to China, should support its domestic production and safeguard its industries and employment. Here, the private sector, Iran and Tehran chambers of commerce in particular, should step in and do their part as well.”
Due to weak economic diplomacy on the part of the government, he said, the export of Iranian home appliances only averages $200 million per year, which is much less than what the country is capable of.
“These products are mainly exported to Iraq, Afghanistan, Azerbaijan Republic and Armenia, and a small portion goes to some European countries,” he added.