Page 17 - IRANRptNov20

Iranian government pledges 40 trillion rial to drive indigenisation of foreign product parts
Strong performance of Iran’s manufacturing sector prompts White House to target blue-collar industries with executive order
The depreciation of the Iranian rial (IRR), which hit 300,000 to the USD for the first time ever last week on the unregulated free market, was the principal contributor to the boost in exports, with regional neighbours seeing Iranian products favourable in terms of their cost compared with locally produced items.
Deputy CEO of the Iran Small Industries and Industrial Park Organization (ISIPO), Asghar Masaheb, reportedly referred to the boost caused by the severe depreciation of the rial and said that the growth in exports was due to markets including Afghanistan and Iraq.
The total value of exported products in the H1 period stood at $1.74bn, at the fixed government exchange rate of IRR42,000 to one US dollar. In the H1 period of the previous Persian calendar year, the total value was $1.49bn.
“In this period, SMEs exported maximum volumes of their products to countries including Pakistan at $1bn, Iraq at $364mn, Afghanistan at $83mn, the United Arab Emirates (UAE) at $50mn, Turkey at $36mn, Azerbaijan at $26mn, Armenia at $25mn and India at $20mn,” Masaheb said.
Popular exports included industrial machinery, white goods including fridges and freezers and gas heaters.
Iran has set aside Iranian rial (IRR) 40tn ($980mn at the official exchange rate, $172mn at the free market rate) for industrial indigenisation projects, Mehr News Agency has reported.
The country has a long history of taking foreign technology and making it its own. Examples of this in the auto industry include the localisation of the Peugeot 206 and 405 cars. The parts for these vehicles are now made by Iranian companies.
Mehdi Sadeghi Niaraki, Iran’s deputy industry, mining and trade minister for industrial affairs, reportedly said that the project was aimed at helping local businesses invest in new technology so that Iran can reverse engineer products and rely less on international supply chains, thus bringing the cost of production down markedly.
“In line with the ‘surge in production’ movement, the Ministry of Industry, Mining and Trade is trying to use all existing capacities in the country,” the official said while launching the new programme.
In July, Niaraki said €277mn was signed over to auto part companies and automakers to indigenise the production of parts seen in foreign brands. It is believed the parts he was referring to included Peugeot 301 components.
Iran’s strengthening manufacturing sector has become pivotal in the country’s resilience to US sanctions, so much so that the White House has issued a new executive order targeting the “construction, mining, manufacturing, or textiles sectors of the Iranian economy”.
“The [Trump] administration is in effect targeting the private sector and the millions of blue-collar workers in the country’s factories, contrary to its stated intention of using sanctions to restrict the financial resources of government authorities,” Esfandyar Batmanghelidj, founder of Bourse & Bazaar—a media
17​ IRAN Country Report November 2020 www.intellinews.com