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EghtesadOnline: The import of 1,339 commodities was banned last year and plans are to add more to the list.

"The number of items in the import ban list will reach 1,530 in the current Iranian year (March 2019-20) to shore up support for domestic production," Deputy Minister of Industries, Mining and Trade Farshad Moqimi was quoted as saying by IRIB News.

"Last year’s import restrictions opened up new markets worth more than $5 billion for local products," he added.

Later in January, the ministry removed 47 commodities from the list of banned imports. Commodities liberalized under the new directive, which come under the wide-ranging categories of “automotives and locomotives”, “mining and mineral industries”, “power and electricity”, “textile and clothing”, “metal and home appliances” and “agriculture” include apparel, footwear, automobiles, copper, lead and tin ore and concentrate, leather, ventilation products, fluorescent lighting, batteries, gas meters and milk powder, according to Financial Tribune.

 

 

Supporting Domestic Production

Referring to the command of the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei regarding the need to support domestic products, Moqimi said the Ministry of Industries, Mining and Trade has adopted a strong commitment to promote the manufacturing sector by reducing reliance on imports, removing hurdles to domestic production and proposing the revision of restrictive regulations.  

Imports categorized as “non-essential goods with domestic counterparts” were banned by the government in the wake of last year’s currency crisis to better preserve its dwindling forex reserves and support domestic products. 

The list banned the import of cars, refrigerators and freezers, automatic folding cabin doors of elevators, farm tractors, milk powder, ambulances, range hoods, stoves, ovens, tea- and coffee-makers, cameras, musical instruments and some auto parts, among others. 

Unusual items, including full lace hair wigs, wimples, thermoses, colored pencils, soap, candles, tomato ketchup, shovel and spades, teabags, whey cheese, cow leather and postcards, were also among the list of banned imports. 

The namesake import ban list contains products of little forex value and is ever-changing, depending on the whim of the ministry.

The deputy minister fell short of saying what commodities will be added to the list.

 

 

Criticism

This import-restrictive measure also gave rise to a large volume of unclaimed imported consignments left at major Iranian ports (shipments that had been ordered prior to the implementation of the new protectionist measures), as well as strong criticisms leveled at the government by the parliament and private sector operators.

The move to ban imports is said to be mainly aimed at economizing on foreign currency. However, according to an expert assessment by the Persian economic daily Donya-e-Eqtesad, commodities included in the list accounted for less than 8% or $4.04 billion of Iran's overall imports in the last fiscal year (March 2017-18), which indicates that the foreign currency saved on the back of such protectionist measure would be insignificant. The import tariff on commodities included in the list ranged from 5-55% last year.

“The ban on imports would lead to a further rise in smuggling and market disruption, particularly when it come to automobiles,” Farhad Ehteshamzad, the chairman of Iran Imports Federation, told ILNA. 

 

 

22% Decline in Imports Last Year

According to the Islamic Republic of Iran Customs Administration, a total of 32.04 million tons of non-oil goods worth $42.61 billion were imported into Iran during the 2018-19 fiscal year, down 17.5% in weight. Imports saw a decline of 22% in value over the year before.

Major exporters to Iran during last year were China, the UAE, Turkey, India and Germany.

The 12-month imports from China dropped more than 28.5% in weight and 22% in value year-on-year.

Imports from the UAE decreased 45% in weight and 35% in value. 

Turkey’s exports to Iran fell 25% in tonnage and 19% in value. 

Last year, imports from India grew close to 15% in value and 12% in weight compared with the year before. 

Germany’s exports to Iran fell 35.5% in weight and more than 20% in value.

The average price of each ton of imported commodities hovered around $1,330, down 5% compared with last year’s same period.

“Last year’s decline in imports is mostly thanks to the restrictions imposed on imports of consumer goods,” IRICA’s top official said, adding that intermediate and capital goods accounted for 85% of imports last year.

Iran’s imports included field corn ($2.09 billion accounting for 5% of total imports), rice worth $1.6 billion (4% of total imports), auto parts except for tires worth $1.38 billion (3% of total imports), soybeans worth $1.16 billion (close to 3% of imports) and oilcake worth $651 million (1.5% of imports).

 

Iran Import Bans