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Tehran got closer

The first regional branch of the Russian-Iranian Business Council was opened in Astrakhan.

The Russian-Iranian Business Council has set up its representative office in Astrakhan in order to more actively develop trade between countries. This is the first regional branch of the organization, and Astrakhan was chosen for several reasons: strong relations with Iran, developed business infrastructure, established business community with 174 joint companies. In addition, the Astrakhan region is a kind of bridge between Russia and Iran in the Caspian section of the North-South Transport Corridor, which has been considered promising for two decades, but so far the development of the International Transport Corridor (ITC) leaves much to be desired.

According to the Agency for International and Foreign Economic Relations of Astrakhan region, Iran is the leading trade partner of the region, its share in the foreign trade turnover of the region is 58.2 percent. All necessary infrastructure for development of joint trade was created in Astrakhan: the Consulate General, a branch of an Iranian bank, an Iranian trade house, where the representative office of the Business Council is located.

‘An important part of the work will be, first of all, to solve the problem of mutual payments: launch and development of a clearing system of mutual settlements between Iranian and Russian businesses using only the national currencies - Russian ruble and Iranian rial, adjustment of foreign economic activity outsourcing system made by us and to be implemented in Astrakhan. And finally, the out-of-court settlement of disputes between Iranian and Russian businessmen through the International Center for Guarantees established by the Russian-Iranian Business Council,’ Chairman of the Council Vladimir Obydenov told "RG".

According to Reza Asli, representative of the Iranian Chamber of Commerce and Industry in Russia, the tasks of the representative office of the Russian-Iranian Business Council and Iranian Trade House established three years ago in Astrakhan are quite similar: "to help each other", including the issue of the North-South transport corridor. It is possible to establish profitable cargo transportation from India to Europe by transit across the Caspian Sea through Iran and Russia. But the corridor is not yet used at full capacity due to difficulties with logistics and infrastructure: there is no single MTK "North-South" operator created, and there are lots of trans-shipment points from sea to road and rail transport and vice versa used. Carriers have to register goods several times until they reach their destination.

Meanwhile, there can be seen some progress in this direction. First, as reported by Reza Asli, in the next nine months, Iran plans to complete the 15-kilometer section of the branch, which will connect the large Caspian port of Enzeli, from where goods go to Astrakhan, with the network of railroads in the country, which is used to transport Indian goods from the south of Iran.

Secondly, Iran hopes for the establishment of a port economic zone and a Caspian cluster in the Astrakhan region, the decree on which was signed in November by Russian Prime Minister Mikhail Mishustin. The Caspian cluster is to become a logistics center of the international transport corridor "North-South", which is expected to finally increase cargo flows.

So far, the figures are not that big: since the beginning of the year, Astrakhan ports have handled 2.338 million tons of cargo, while they plan to transport 20 million tons of goods along the "North-South" corridor.

'Now the main goods purchased by Iran through the Astrakhan region are grain, wood, mutton, fat and oil of animal and vegetable origin. We plan to expand this list,' added Vladimir Obydenov. 'Fruits and vegetables, various foodstuffs, conservation, equipment and machinery, fertilisers, industrial and household chemicals, gasoline, and diesel fuel. We also find it necessary to expand the route network of Ro-Ro ferries.'

As representatives of Russian-Iranian companies confirmed to "RG", they plan to increase the range of imported goods. For example, the AFT company supplies the Russian market with canned tuna grown in Iran, but sees prospects for the import of fresh fish as well. And the company "Shahrvand Trade" established in Astrakhan on the initiative of the Iranian government delivers tomato paste to Russia, but in the near future plans to open a retail store with a variety of goods produced in Iran, including the famous Oriental spices. The company is interested in purchasing pet food from Russian producers for export to Iran.

So far, the growth of cargo traffic has been hampered by difficulties, including those at customs. Therefore, if exports to Iran in 2019 amounted to $247 m, import - $17.4 m. This proportion has remained practically unchanged this year: exports significantly exceed imports. Thus, in January-September goods valued at $159.4 m were imported from Astrakhan to Iran, and just $16 million - from Iran to Astrakhan.

'This is the main problem: for goods going through the ports of Astrakhan customs clearance is much more expensive,' said Reza Asli. 'Customs clearance of a black tea container weighing 11.5 tons in Kazakhstan costs about $7,500, in Astrakhan it is $19,000. To clear pistachios in Belarus, Kyrgyzstan, Armenia it costs some $10,000 - 15,000, and in Russia it is already $30,000.'

The lack of direct flight connections between Iran and Astrakhan also slows down business activity.

'We invite investors, and no plane is available,' says Reza Asli. 'Guests travel through Moscow, and the one-way trip takes more than 20 hours.'

'Many problems in Russian-Iranian trade have not yet been resolved,' Vladimir Obydenov told RG. 'The innovations of the Russian-Iranian Business Council are designed to resolve the existing contradictions and establish Russian-Iranian trade in the best possible way.'

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