Image credit - Tehran Times
Hojatollah Abdolmaleki, the Secretary of Iran’s Free Zones High Council, arrived in India on Monday for discussions with Indian officials and representatives of one of India’s largest steel companies. The purpose of the visit is to explore opportunities for strengthening cooperation between Iran and India in Iran’s free zones.
During his visit, Abdolmaleki extended an invitation to the Indian side to invest in Iran’s free zones. The Indian production group has shown keen interest in investing in the production of downstream steel products in Iran’s free and special economic zones. This interest is driven by the advantages offered by Iran’s free zones, such as low production costs, ease of doing business, import and export facilities, and well-developed infrastructures, including the Chabahar Free Zone.
Abdolmaleki recently unveiled 10 new strategies aimed at increasing investment and export in Iran’s free and special economic zones. These strategies emphasize the importance of fostering collaboration among the investment and economic departments of the country’s free zones.
They include initiatives such as joint marketing, enhancing logistics and re-export capabilities from free zones, leveraging the potential of international organizations and agreements, identifying the unique advantages of free zones, adopting the passenger goods model to maximize revenue, participating in exhibitions and business events, establishing a supply chain of goods among free zones, aligning with China’s One Belt One Road initiative, developing a comprehensive tourism network for free and special zones, and promoting monetary, banking, and financial cooperation.
The inception of free trade zones (FTZs) in Iran can be traced back to the Iranian calendar year 1368 (March 1989 – March 1990). This initiative was prompted by the decline in the country’s oil revenue in the previous year, which compelled the government to encourage non-oil exports. The first two FTZs in Iran were established in the southern region. The initial one was the Kish Free Trade Zone, founded in 1368 on Kish Island in the Persian Gulf. The second one, the Qeshm Free Trade Zone, was established the following year on Qeshm Island in the Strait of Hormuz.
Since then, an additional five free trade zones have been established in the country. These include Chabahar in the southeastern Sistan-Baluchestan Province, Arvand in the southwestern Khuzestan Province, Anzali in the northern Gilan Province, and Aras and Maku in the East-Azerbaijan and West-Azerbaijan Provinces respectively, both located in the northwest of the country. The development of existing FTZs and the establishment of new ones have become integral to the Iranian government’s economic strategy, showcasing its dedication to diversifying the economy and promoting non-oil exports.
The economic ties between India and Iran are robust, and Iran’s advantageous location and the presence of the Chabahar port offer India an alternative route to connect with Afghanistan and the Central Asian republics. This becomes particularly significant as Pakistan denies India overland access. Furthermore, the cooperation in Iran’s free zones presents an opportunity to fully harness the potential of collaboration between the two nations, granting India a strategic edge in accessing the Middle East.
The development of free zones in Iran, including the Chabahar Free Zone, can serve as a gateway for India to expand its economic and strategic influence in the region. This collaboration not only strengthens their bilateral relationship but also holds substantial implications for India’s economic and strategic interests in the region.