Economy

Iran, Armenia Vow To Reach Trade To 1bn Dollars Within Six Months

Hamid Torabi Feature 25 January 2021
Iran, Armenia Vow To Reach Trade To 1bn Dollars Within Six Months

Armenian Economy Minister Vahan Kerobyan has said that Tehran and Yerevan are willing to augment trade to $1b within six months, based on negotiations with an Iranian envoy to Armenia.

“The volume of bilateral trade last year was 400 million dollars, which is a small figure taking account our capacities,” Kerobyan said in a meeting with the governor of Iran’s central province of Isfahan, Abbas Rezaie, on January 24, and praised Iran capacities and called for expanding economic relations between two countries. 

On January 23, Iran’s Minister of Industries, Mining and Trade Alireza Razm-Hosseini announced the signing of an agreement between Iran and Armenia, noting that the agreement will help to boost the volume of trade between the two countries.

"Armenia is one of the Eurasian countries and we have a positive attitude towards trade with Eurasia," Iranian minister said, adding that sectors of mines, foodstuff and home appliances are suitable opportunities for the two countries' tradesmen to promote mutual collaboration. 

For his turn, Armenian Economy Minister Vahan Kerobyan who arrived in Tehran on January 22 to discuss the expansion of trade ties with Iran, said after signing the agreement that his country is ready for mutual trade and cooperation and joint productions to help Iran enter other countries' markets. He also noted that Armenia owns a big market, he said that Armenia is ready to host Iranian tradesmen to be able to enter the third countries.

Meanwhile, heads of a number of Iranian and Armenian small and medium-sized enterprises (SMEs) discussed establishment of a technology exchange center during the meeting. 

In a meeting with the head of Armenian Center for Investment and Supporting Small and Medium-Sized Enterprises, Levon Ohansyan, the CEO of Iran Small Industries and Industrial Towns Organization Ali Rasoulian referred to his organization's experiences in creating and developing infrastructure in industrial towns and areas, as well as indigenizing of developing small and medium industries, he voiced readiness for providing technical services and sharing experiences with Armenia.

Earlier in his meeting with Governor of the Central Bank of Iran Abdolnasser Hemmati, Armenian Economy Minister Vahan Kerobyan called for the development of trade and economic relations between the two countries, particularly joint venture investments and production activities of important Iranian companies in Armenia. 

Armenian minister also intends to hold talks with a number of Iranian officials, including Minister of Industry, Mine and Trade Ali Reza Razm Hosseini, Energy Minister Reza Ardakanian, Finance and Economic Affairs Minister Farhad Dejpasand, Vice-President for Science and Technology Sourena Sattari and Head of Iran Chamber of Commerce, Industries, Mines and Agriculture Gholamhossein Shafei during the five-day stay in Iran.

In late December 2020, during a meeting between Deputy Oil Minister Amir-Hussein Zamaninia and Deputy Minister of Territorial Administration and Infrastructure of Armenia Hakob Vardanyan in Tehran, the two sides explored grounds to boost collaboration in energy projects. 

The agenda included ways of expanding cooperation in electricity, water as well as technical and engineering sectors. The two sides mainly focused on renewing their contract for swapping gas with electricity.

A 20-year contract was signed by the two countries in 2004 and took effect in mid-2009. According to the agreement, Iranian natural gas is bought by Armenia for power generation and is exported to Iran. Tehran receives 3.2 kilowatt-hours of electricity in exchange for 1 cubic meter of natural gas.

Following the 44-day Armenia-Azerbaijan war and the subsequent Russian-brokered agreement, Iran lost part of its previously long border with Armenian-controlled territory, with the return of Azerbaijani control of the border regions that had been under Armenian occupation. Tehran had enjoyed extensive cooperation with Armenia in the occupied territories, including the establishment of a hydroelectric plant that serves Iran’s border regions. 

In parallel to its loss of political influence in the region, Iran’s role in regional gas trade has greatly diminished. Azerbaijan and Turkey are in the process of building a gas pipeline that will connect Nakhchivan to the Turkish gas transmission system, eliminating Azerbaijan’s need to transit gas to the exclave via Iran. At the same time, Turkey has drastically reduced gas imports from Iran, but Armenia is likely to continue to import natural gas from Iran, and export electricity to Iran. 

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