Iran is making significant strides to boost its non-oil exports as part of its economic diversification strategy, especially aimed at reducing reliance on oil revenues amid stringent international sanctions. The Iranian government has reported substantial growth figures for non-oil exports, with totals reaching approximately $48 billion for the current Iranian calendar year, which ended on January 19, 2025. This figure marks an impressive 18 percent increase from the previous year, reflecting Iran's efforts to expand its trading horizons beyond oil.
Recent collaborative initiatives between local Iranian chambers of commerce signal this trend, particularly focusing on enhancing exports to neighboring Iraq. Mostafa Mousavi, the chairman of the Khorramshahr Chamber of Commerce, and Mahmoud Najafi Arab, the chairman of Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIMA), recently formalized their commitment to increasing trade. During the signing ceremony of their cooperation document, Mousavi highlighted the potential for strong bilateral trade ties, emphasizing the commercial opportunities presented by the southern provinces of Khorramshahr and Basrah.
Mousavi noted, "We hope to streamline trade operations... to increase exports of more goods to the Iraqi market." This focus is particularly pertinent as Iraq has become one of Iran's top trading partners, with bilateral trade exceeding $10 billion annually. Yet, Iranian exporters face persistent challenges, including customs barriers, banking restrictions, and logistical difficulties, which often impede their ability to fully capitalize on this opportunity.
Efforts to alleviate these barriers and facilitate trade are underway. Iranian officials have initiated legislative changes to reduce the economic burdens faced by exporters, including easing foreign currency repatriation requirements and increasing daily rediscount credit limits for export-oriented companies.
Significantly, this renewed focus on exporting is evident within Iran's provinces. For example, the Fars province alone registered a 12 percent growth in non-oil exports over ten months, indicating not only increased production capabilities but also greater market access for Iranian goods. Mohammad-Sadeq Hamidian, the head of the province's Chamber of Commerce, reported exports valued at $1.136 billion, indicating both quantity and financial growth for non-oil products.
Despite the challenges, the Iranian government has also launched additional initiatives. For example, the 11th session of the Supreme Council for the Development of Non-Oil Exports aimed to address the various obstacles hindering foreign trade. During this session, which has not convened for four years, issues such as excessive regulations and inadequate trade infrastructure were highlighted.
"The revival of the council was prompted during this year’s National Export Day event," said Alireza Dehghan Dehnavi, head of Iran’s Trade Promotion Organization (TPO). He explained the importance of aligning national trade policies with economic reforms to support the export agenda effectively. The council agreed upon several strategic directions to navigate current obstacles, including establishing provincial export development task forces and regularizing council sessions to maintain consistent focus on necessary reforms.
Another innovative approach involves pushing for alternative payment mechanisms such as barter trade and local currency transactions, particularly with trading partners like Iraq. This strategy stands as part of Iran's broader plan to mitigate the impacts of U.S. sanctions on its economy.
The TPO’s measures also include promoting value-added products and facilitating the digital transformation of exporting firms. These efforts have been illustrated through investments made by exporters for infrastructure and technological advancements to stay competitive.
Overall, the Iranian private sector is increasingly optimistic about its potential to engage effectively with markets outside its borders. With Basrah province proving instrumental as both a consumer and logistical partner, the emphasis on infrastructure development—crucial for enhancing trade capabilities—is becoming more pronounced.
Going forward, Iran’s strategy of reinforcing trade ties with Iraq and diversifying its non-oil export markets will be central to its ambitions to stabilize its economy and reduce dependency on oil revenues. By fostering cooperation and implementing necessary reforms, Iranian officials are set to redefine the nation’s trade paradigms for years to come.