Iran’s Expanding Trade with the Eurasian Economic Union

Iran’s Expanding Trade with the Eurasian Economic Union_Persian Files_SpecialEurasia

Persian Files ISSN 2975-0598 Volume 26 Issue 3
Author: Silvia Boltuc

Executive Summary

This report primarily aims to evaluate the growth of trade between Iran and the Eurasian Economic Union (EAEU), particularly focusing on non-oil exports.

Recent developments underscore Iran’s growing economic integration with the EAEU, facilitated by a Free Trade Agreement (FTA) and the active participation of the private sector. Trade figures from Iran’s northern provinces, particularly Mazandaran, reveal significant increases in both the volume and value of non-oil exports.

This report, based on previous analyses by SpecialEurasia, local media reports, and official statements, aims to provide an updated overview of Iran’s trade activities with EAEU member states.

Key Points

  • Iran-Eurasian Economic Union’s increasing trade volume supports Tehran’s economic strategy and confirms the Iranian cooperation with EAEU members, especially Moscow.
  • Mazandaran province is becoming central to Iran’s trade with the EAEU.
  • The FTA between Iran and the EAEU has simplified trade and opened new market access.
  • Iran’s engagement with the EAEU is part of its economic diversification plan, aiming to reduce reliance on oil.

Background Information

Thanks to the Free Trade Agreement (FTA) signed in 2019 and extended until October 2025 , Iran’s trade relations with the EAEU have intensified in recent years. The agreement has led to reduced tariffs, facilitating greater market access for Iranian goods.

Mohammad Ali Dehghan Dehnavi, head of Iran’s Trade Promotion Organisation (TPOI), highlighted Iran-EAEU trade has increased by over 2.5 times and emphasised the importance of competitive production to boost non-oil exports, particularly to the EAEU member states.

The province of Mazandaran serves as a case study of Iran’s enhanced trade activities. According to Amir Jamshidi, the director general of Noshahr Customs Office, Mazandaran exported 814,000 tonnes of non-oil goods between 21 March and 21 September 2024, a 6% increase compared to the same period in 2023. The total value of these exports amounted to over $260 million, reflecting a substantial 61% increase compared to the previous year.

On October 8th, 2024, representatives from the Tula Chamber of Commerce and Industry and the Mazandaran Province Chamber of Commerce and Industry met virtually to discuss potential business collaborations. During the meeting, they explored opportunities for trade, logistics, and knowledge sharing. The parties agreed to continue these discussions through B2B meetings and sign a cooperation memorandum. Tula also invited Mazandaran to participate in an upcoming economic forum, signalling their commitment to building stronger economic ties.

Geoeconomic Scenario

  • Mazandaran Province: Emerging Trade Centre. Recent figures showed Mazandaran province’s emerging role in supporting Tehran’s trade with EAEU members. Thanks to its strategic location on the Caspian Sea basin in the country’s north, and through the development of the regional non-oil sector, Mazandaran has become a key trading hub capable of expanding its trade with different Russian regions and cities.
  • EAEU: Growing Economic Influence. The EAEU is becoming a more significant player in the Eurasian economic landscape, especially in the so-called ‘multipolar world’ according to the Kremlin’s narrative. Because of its strategic geographical location and abundant resources, the EAEU has become a magnet for Iranian exporters. The FTA between the parties and the establishment of the EAEU trade house in the Iranian market has strengthened their relationship by reducing tariffs and facilitating Iranian businesses’ access to the EAEU markets.
  • Iran’s Economic Diversification Strategy. Tehran’s increasing trade with the EAEU forms part of its broader efforts to diversify its economy, lessening its reliance on oil revenues and counter the Western sanctions’ pressure on its economy. This cooperation fits within Tehran’s larger regional economic agenda. The increase in non-oil exports to the EAEU shows the Iranian capacity to cultivate new industries and compete globally. The country is likely to continue expanding these economic ties in line with its strategic objectives.

Conclusion/Recommendations

The enhanced economic collaboration between Iran and the EAEU provides an opportunity for Tehran to strengthen its non-oil exports and pursue economic diversification, thereby easing the repercussions of Western sanctions.

This deepening relationship, particularly with Moscow, is further reinforced by both countries’ involvement in developing the International North-South Transport Corridor (INTSC), which is expected to benefit not only them but also other EAEU members.

However, the escalating military tensions in the Middle East, marked by recent Iranian missile attacks against Israel in response to Tel Aviv’s actions in the Gaza Strip and against Hezbollah in Lebanon, add a layer of uncertainty. If these tensions escalate into a broader regional conflict, the consequences would reverberate beyond Iran, affecting the entire Eurasian geopolitical landscape.

This instability could complicate Tehran’s efforts to capitalise on its economic ties with the EAEU, as regional security risks might overshadow trade opportunities.

While the trade initiatives between Tehran and the EAEU signal positive relations, particularly considering the INTSC and the non-oil sector, the evolving geopolitical dynamics in the Middle East represent a significant challenge.

To better understand the progress and potential of the EAEU, as well as the future of Iranian exports to its member states, it is helpful to monitor the Middle Eastern regional dynamics related to the Palestine situation and stay informed about the developments in the Ukraine conflict.


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