Iran-Russian Bilateral Trade Increased In March-April

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Near-Russian Exporters Looking To Fill Gaps Created By Exiting US and European Brands  

The Iran-Russia Joint Chamber of Commerce has stated that Iran’s exports to Russia have increased since the outbreak of the Ukraine conflict. Several reasons were given, notably the existing positive approach between Russian and Iranian private companies and their governments. The two countries signed a free trade agreement via the Eurasian Economic Union last year.

Iran traditionally imports cooking oil and wheat from Russia, although the country is banned from exporting grains by the United States, this is no obstacle for Russia as it is already sanctioned and can essentially do what it wants and ignore Washington’s Iranian position.

The Russian government has notified exporters this week that they can export essential goods to Iran based on rationing put in place at the start of the Ukraine conflict, and that will now be lifted in May. Iranian merchants can use the Tourism Bank to transfer money to Russia as Iran, also blocked from SWIFT is linked to Russia’s SPFS interbank system.

Trade with Russia is conducted in Rubles, while Iranian businessmen can also transfer money via Mir Business Bank or other Russian banks in Dubai or use part of their export revenues to import essential goods from Russia. The Iranian government is also looking to exempt Iranian exporters of agricultural products, construction materials, and clothes from returning export revenue to the NIMA system to increase export volumes to Russia.

Prominent Iranian clothing brands are starting to use the opportunity to replace European and American brands that have left the Russian market. These include well-established fashion brands with a hit of the east, such as Bodyspinner, SalianSiawood and Sarak to name just a few.

Iranian and Central Asian Fashion events this year will be geared towards the Russian market rather than to the West.

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Russia Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Eurasia, including China, Russia, India, and the ASEAN nations, assisting foreign investors into the Eurasian region. Please contact Maria Kotova at russia@dezshira.com for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.

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