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Iran Excluded From Export Routes of China and India

US sanctions on Iran are heavily affecting the latter’s trade exports with former trading partners.
US sanctions on Iran are heavily affecting the latter’s trade exports with former trading partners.

With a crumbling economy, and with several US sanctions stacked against them in regard to their nuclear program, human rights violations, and their support of global terrorism, the Iranian regime is desperate to find a way out of their current situation, without any success so far.

One of the most affected areas, after its oil industry, is the regime’s exports and imports. Both of these fell sharply after the sanctions were imposed, and besides oil, most of Iran’s mines and natural resources are hit by the sanctions too. Even one of the regime’s large sources of export revenue, industrial metals, has been lost.

Therefore, most countries, that have previously traded with the regime, have decided to draw a line around Iran and expel it from their import and export cycle.

The regime has tried to show that the sanctions are not effective by expanding its missile and nuclear arsenal. The regime’s officials, from the supreme leader Ali Khamenei to its president, have also tried desperately to present an economic boom despite the sanctions. This is far from the real situation in Iran, and the dire living conditions of the Iranian people are what has resulted from the regime’s stubbornness to rectify the country’s problems.

One by one, most of the countries that formerly traded with the regime have decided to remove Iran as a corridor for their imports and exports, and instead have selected other countries despite having to negotiate longer travel routes.

In December 2020, China, which is the largest trading partner of the Iranian regime, decided to transit its goods to countries in the Caucasus region and Eastern Europe, rather than go through Iran. This detour has resulted in the trade route spanning a further nine thousand kilometers from Central Asia, Azerbaijan, Georgia, and Turkey to Eastern Europe.

It is not just China that has made the decision to alter its trade routes. India has also ceased its export cycle with Iran, contrary to the expectations of the regime, which expected that the export of Indian goods to Russia would be done through Iran. India has chosen to bypass Iran and export goods to Russia through Georgia instead.

The regime previously signed a 25-year cooperation agreement with China for their trade partnership, and they have been cooperating intensively with India for many years in the port of Chabahar. This backbone-breaking decision of the two most populated countries in the world to remove Iran from their export cycle has led to the regime facing severe damages from these contracts, according to many of the regime’s economic experts.

In addition, in executive cooperation with the regime, India and Russia already signed a memorandum of understanding in 2018 to facilitate and accelerate the implementation of the North-South International for their imports and exports.

According to this memorandum, which was initially discussed in 2000, the decision was made to connect the International Corridor for the North-South Indian Ocean and Persian Gulf transportation through Iran to the Caspian Sea, and then from Russia to St. Petersburg and Northern Europe.

Over the last two months, since the invasion of Ukraine by Russia, it was expected that China and India would choose Iran as the corridor for their exports to Russia, due to the problems in the Black Sea. However, India has avoided Iran altogether in its export cycle and has instead chosen to export goods through Georgia, which is another blow to the regime.

Reportedly, one of the reasons for India’s decision to find alternative routes is that over the past two decades, the regime has failed to complete the construction of the national railway from Chabahar leading to Afghanistan and Central Asia, and Iran’s harbors also lack the infrastructure and ships to cover bilateral trade.

The regime’s official customs statistics also show that due to the lack of infrastructure in Iranian ports, around 60 percent of Iran-Russia trade is carried out through the Republic of Azerbaijan instead of the Caspian Sea.