Russia trade with Iran jumps more than 70% since January

Russia trade with Iran jumps more than 70% since January
Iranian President Hassan Rouhani meets with Russian President Vladimir Putin in Astrakhan in September 2014.jpg / Photo by CC
By bne IntelliNews August 15, 2016

Trade between Russia and Iran has increased by 70.9% since the removal of sanctions against the Islamic Republic in January, according to Russia’s ambassador to Tehran, Levan Dzhagaryan.

The Kremlin is likely to seize on the good news regarding the increase in trade as vindication of its strategy to further develop ties with its near neighbours and other emerging markets amid the continuing Western sanctions. Tehran will likely do the same.

Dzhagaryan said the value of trade between Iran and Russia had already reached $697mn since sanctions were removed, adding that the figure is likely to exceed that.

The majority of the trade deals so far have been at a government-to-government level, of which the majority were military contracts, including the S-300 rocket system.

"In particular, Russian exports to Iran jumped by 91.5% and amounted to $697mn. Russian imports from Iran increased by 16% to $158mn. The boost in trade was achieved by supplies of machinery, ground vehicles and weapons," Russia Today quoted Dzhagaryan as saying.

The official added that the removal of sanctions against Iran had triggered a surge in interested from Russian firms in doing business with Tehran.

“Russian companies are resuming existing ties with Iran, while new firms are ready to get access to the market. Of course, the further expansion of trade is one of the main priorities of the bilateral cooperation with Iran,” Dzhagaryan added.

In 2015, Russian companies held their first exclusive exhibition of industries in Tehran, with companies including Russian Railways, GAZ Trucks in attendance.

On the sidelines of the event, the Russian state holding company Rostec, which is involved with hi-tech industrial products for the civil and defense sectors, said it had held talks with Iranian government and military officials to sell equipment. In an interview, Viktor Kladov, head of international cooperation fat Rostec, said: “We concluded an agreement with local agencies, which included servicing of new electronics [for helicopters].”

Kladov noted at the time the bestseller in the Iranian market is the MI-17 helicopter, but said that, “We have added a new range of planes and plan to refurbish many on the ground already.”

Meanwhile on August 9, Russian Deputy Minister Dmitry Rozogin said in a press conference following a meeting with Russia-Iran-Azerbaijan summit in Baku eariler in the week that Russia had delivered 50% of the long-anticipated S-300 air defence system.

The head of Rostec, Sergei Chemezov, said in July that Russia was planning to complete the delivery of the S-300 air defence systems to Iran by the end of 2016, Sputnik reported.

The $800mn contract to deliver the Russian S-300 systems to Iran was signed in 2007.

 Iranians visit Russia in droves

Meanwhile, Dzhagaryan said more than 35,000 Iranians travelled to Russia in 2015, marking a significant shift in tourists and businessmen heading north.

Iran and Russia are pushing ahead with plans to boost cooperation, the figure announced will likely please both the Putin and Rouhani administration as proof of the growing ties.

“Last year, the Russian diplomatic mission in Iran issued about 35,000 visas, mostly travel, to Iranian citizens. In addition, for the first time, Iran entered the top 20 countries by number of tourists visiting Russia,” Levan Dzhagaryan told the Russian broadcaster.

That figure represents a jump of more than 110% compared to the previous year with Dzhagaryan saying it is likely to surpass that figure this year.

The official said that only 25,000 Russians visited Iran in the same period. He added that he hopes that figure is likely to change in the near future.