A review and assessment of Iran’s major trade indices and the presentation of strategies for improving the country’s trade performance
Abstract
A review of Iran’s foreign trade situation in recent years shows that global trends have been moving toward more open economies and an increasing share of trade in gross domestic product (GDP). However, in Iran, an upward trend consistent with global patterns has not been observed. Iran’s share of total global exports has declined, and the country’s ranking in terms of export volume has also decreased. Furthermore, as a result of international sanctions, the diversity of Iran’s export partners has significantly diminished over time. Conversely, although the number of Iran’s exported goods has increased, this growth has been slower than the global trend, leading to a decline in Iran’s ranking in terms of export product variety.
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Analysis of Iran’s Key Trade Indicators
This study assesses Iran’s foreign trade using World Bank export indicators. The findings highlight limited global integration, low diversification, and instability in export performance.
1. Degree of Economic Openness
Economic openness increased until 2005 but declined afterward. Since 2012, trade and growth have been highly unstable, showing weak global engagement.
2. Trade Complementarity Index (TCI)
Iran’s exports align most with Syria and Iraq, though trade with Syria is minimal. China, despite being the main partner, shows low structural compatibility.
3. Trade Potential Index
Export potential is best utilized with Iraq and China, indicating overdependence on few markets. Trade opportunities with Russia and Syria remain underused.
4. Trade Intensity Index
Trade intensity in “fruits and nuts” has declined for all main partners, especially Iraq, reflecting reduced reliance on Iranian goods.
5. Export Diversification
Export destinations dropped from 21 countries in 2004 to 7 in 2023. Product variety rose slightly but below global trends, increasing vulnerability to sanctions.
6. Export Product Persistence
Only 28.7% of export items remained stable over 11 years; 43% lasted under five years, showing weak continuity and lack of long-term export planning.
Impact of Sanctions on Foreign Trade
Sanctions have significantly disrupted Iran’s trade structure by limiting partner choices, causing the loss of traditional markets, and shifting trade policies toward short-term, reactive decisions rather than long-term strategic planning.
Legislative, Supervisory, and Policy Recommendations
To strengthen Iran’s foreign trade and exports, policymakers should pursue WTO and regional trade membership, enhance economic diplomacy, simplify export regulations, ensure trade agreement compliance, maintain macroeconomic stability, and align trade and industrial policies toward export-oriented growth.
This study is conducted at Islamic Parliament Research Center Of The Islamic Republic Of IRAN by Zahra Kaviani in collaboration with Mohammadsadegh Birjandi and Hossein Harvarani in 2025.
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