EghtesadOnline: The Trade Promotion Organization of Iran is doing all it can to promote barter trade by setting up special internal and international "barter chambers" to connect exporters and importers, the TPO head said.
Hamid Zadboum said domestic foreign companies can tap into the new chambers to conduct trade without having to transfer money.
"The TPO is in talks with some countries and is working on ways and means to improve barter," IRIB news quoted him as saying.
The measure is in line with efforts to expand foreign trade hit hard due to a combination of factors, namely the fresh US sanctions, border restrictions imposed by most countries to curb the pandemic and the inability and unwillingness of Iranian export companies to return their proceeds.
The historic decline in oil export, crippling US restrictions on banking and money transfer and difficulties in importing raw material and intermediate goods have undermined Iran’s economy and battered businesses. The coronavirus pandemic has made a bad situation worse.
As per the TPO initiative, exporters and importers can enter an agreement "to import goods in proportion to exports without transferring money", Hamid Zadboum said.
The option is available to Iranian firms in that exporters can use their overseas earnings to import goods. Last month the government amended rules for the repatriation of non-oil export revenues allowing exporters to use their earnings to import goods, raw materials and machinery either for their own needs or a third party.
The so-called “import in return for export” or the “currency barter between exporters and importers”, was one of the options for exporters to fulfill their financial commitments in a package announced by the CBI. But the regulator scrapped the rule for the current fiscal year (ends March 2021) before restoring it.
The government’s measures to promote foreign trade also included revival of a policy to allow companies to import goods “without transferring currency”.
Measures for ‘import without forex allocation’ allow companies to use their own forex, in or outside the country, to import. The CBI had suspended such measures reportedly due to transparency issues and concern over capital flight.
Government officials say the new measures should help revive foreign trade that has taken a drubbing over the last two years due to the US restrictions.
According to Iran's customs officials, non-oil foreign trade stood at 62.84 million tons worth $30.3 billion in the first half of the current fiscal year (March 20-Sept. 21), indicating a 28% decline in value compared to the corresponding period last year.
H1 non-oil exports accounted for 46.31 million tons worth $13.56b and imports reached 16.52 million tons worth $16.78 b resulting in a trade deficit of $3.22 billion – something the government can ill afford under the dire economic conditions.
Compared to the corresponding period last year, export and import registered 35% and 21% decline in value, respectively.
Iran’s foreign trade was worth $42.16 billion during the same period last year, with exports near $20.94 billion and imports $21.22 billion.