‘Shifting export track from raw material sales to finished goods, a necessity’

TEHRAN- The Head of the Trade Promotion Organization of Iran (TPO), during a meeting with representatives and the board of directors of the Iran Guilds Chamber, announced the formulation of a new roadmap for a leap in non-oil exports and emphasized the strategic necessity of transitioning from raw and semi-raw material exports to high-value-added finished goods.

According to the Public Relations Department of the Trade Promotion Organization of Iran, this meeting was held with the aim of explaining new structures for guild participation in the international supply chain and examining operational solutions to remove administrative, currency, and regulatory obstacles facing guild exporters.

The Head of the Trade Promotion Organization of Iran, pointing to the structural challenge of the country's trade balance from a qualitative perspective, stated: One of the fundamental and problematic issues in foreign trade is the low average value of export goods compared to import items. Currently, the average value per ton of the country's export goods is about $300, while this figure for imported goods reaches about $2,000 per ton. This deep gap indicates the continuation of the traditional approach and reliance on raw material sales in the country's economy.

Emphasizing the need to enhance Iran's position in the global value chain, he added: A major portion of our non-oil exports is concentrated in upstream industries such as the steel chain, iron ore, pellets, and ingots, whose marketing and sales, due to the nature of raw materials, lack the scientific complexities of trade. In contrast, production and distribution guilds deal with a chain of finished and ready-to-consume goods (such as furniture, clothing, footwear, leather, and handicrafts), whose export value per ton starts at $1,000 and reaches several thousand dollars in areas like clothing and footwear. Shifting toward these products is our main mission to improve the country's currency indicators.

The Deputy Minister of Industry, Mining and Trade, referring to the successful experience of leading East Asian countries such as China and Vietnam in regional markets, emphasized: Successful global producers do not merely send goods to destination ports; rather, by directly participating in the distribution and retail chain, they capture the main profit margin. Today's success model is renting stores, shelving in large chain stores, and directly supplying products to the final consumer in target markets.

He identified the Eurasian region and neighboring countries as the strategic priority for the country's guilds and said: With the conclusion of the free trade agreement between Iran and the Eurasian Economic Union and the tariff elimination on 87% of goods, an unparalleled platform for guild entrance has been created. For example, Iran's leather industries, despite their excellent quality, have a negligible share in neighboring countries' markets, while these products sell at several times the domestic price in markets such as Armenia, Azerbaijan, and Iraq. The Guilds Chamber must, as a national driving force, guide guild members toward physical and direct presence in target markets, especially the large Russian market.

The Head of the Trade Promotion Organization of Iran announced the creation of new executive structures to support the guild sector and declared: At the Trade Promotion Organization, we will activate the "Guilds Export Desk" in a specialized and systematic manner to review export cases guild by guild and remove obstacles facing each union separately.

According to Dehghan Dehnavi; the Trade Promotion Organization of Iran is ready to sign bilateral memoranda of understanding with any guild union that has a formulated export plan and the ability to fulfill export commitments. In these memoranda, the organization's commitments will be specified in five facilitation axes, and in return, the union's commitment to achieve a specific export amount (from several million to hundreds of millions of dollars) will be included, so that government support shifts from general support toward performance-based and results-oriented support.

The Head of the Trade Promotion Organization of Iran also introduced tools such as Export Management Companies (EMCs), Iranian commercial centers abroad, and the network of commercial attachés as logistical and marketing arms serving the development of guild capacities.

The Deputy Minister of Industry, Mining and Trade, acknowledging the concerns of economic activists regarding the complexities of regulations for repatriating export proceeds, said: Although repatriating currency to the country's economic cycle is a national necessity, the form of regulation should not hinder the activities of registered exporters. To prevent regulatory misunderstandings and resolve order registration discrepancies, it was decided to establish a "Dedicated Service Desk" with the participation of specialized export and import regulation offices and currency service offices of the organization, so that each union can refer 3 to 4 of its challenging cases to this desk for case-by-case resolution and rule amendments.

The Head of the Trade Promotion Organization of Iran, at the end of this meeting, referred to the situation of handmade carpet exports and said: "Iranian handmade carpets are beyond a commodity; they are the cultural and artistic flag of the country in international markets. The main challenge in this area is the issue of currency commitment and obligations, as well as the time-consuming process of repatriating sales proceeds. The Trade Promotion Organization continues to pursue the proposal to completely exempt handmade carpets from currency obligation or at least increase the repatriation deadline through the Central Bank and the Cabinet to restore dynamism to this authentic industry."

EF/MA