‘Resumption of banking transactions vital for SL-Iran trade growth’ | Sunday Observer

‘Resumption of banking transactions vital for SL-Iran trade growth’

Sri Lanka-Iran trade relations cannot grow until banking transactions between the two countries resume, said a top official of the Iranian embassy in Colombo last week.

Trade relations between Tehran and Colombo has slowed down to unprecedented levels following sanctions imposed by the United States and the Europe in 2013 urging countries to restrict trade with Iran.

However, Iran has maintained a solid economic growth rate with strong trade ties with countries across the world, the official said.

“Our relations with Sri Lanka is firm and deep rooted. However, a certain amount of understanding is needed to strengthen it further. Both countries have enormous potential for sharing expertise in multiple fields. Iran is always ready to help Sri Lanka with its engineering expertise,” he said.

Iranian Ambassador Mohammad Zaeri Amirani said there is an opinion that if Sri Lanka resumes banking transactions with Iran it will affect its relations with the United States.

He was speaking at a trade seminar organized by the National Chamber of Commerce of Sri Lanka last week.

Trade between the two countries surpassed US$ 1 billion in 2008 for the first time and exceeded to US$ 1.6 billion in 2011. Trade dropped to US$ 858 million in 2012 and further plummeted to US$ 162 million in 2015 due to the drop in imports from Iran, especially petroleum products.

Iran is a major market for Sri Lankan tea, accounting for around 80 percent of exports in 2015. Coconuts, coco peat and fibre, paper boxes and industrial gloves are some of Sri Lanka’s exports to Iran while electrical insulators, screws, nuts, bolts and earth moving machinery are imported from Iran.

“Sri Lanka could take advantage of the benefits offered for trade, investment and joint venture establishments in Iran’s free trade and industrial zones such as Chabahar. Kish and Qeshm,” the ambassador said.

Iran enables foreign companies to set up operations within a day or two and offers a 25-year tax holiday.

“We invite Sri Lanka to explore trade and investment opportunities in Iran in potential sectors,” the ambassador said.

Iran is keen to supply medicine, medical equipment, petrochemicals, agricultural machinery and fertilizer to Sri Lanka while black tea, animal feed, food, natural rubber, bicycles, petroleum oils are some of the potential items for exports to Iran.

Iran’s GDP is estimated at US$ 1.535 trillion this year dominated by oil and gas production despite over 40 industries are directly involved in the Tehran Stock Exchange. With 10 percent of the world’s oil reserves and 15 percent of gas reserves Iran is considered an ‘Energy superpower’. It is ranked the 18th largest by purchasing power parity and 20th by nominal gross domestic product.

Iranian Embassy Commercail Attache, Dr. Hossein Bamiri said the major barrier for promoting trade between the two countries is the non banking transactions. Sri Lanka’s private sector request the authorities to resume banking transactions.

Iranian Parliament Speaker Ali Larijani at a meeting with his counter part Karu Jayasuriya called for the removal of banking barriers impeding trade exchanges between the two sides.

“Iranian companies are keen to explore opportunities and expand their presence in Sri Lanka in the technical and engineering sectors,” Dr. Bamiri said.

He said Iran is keen to bring a delegation to Sri Lanka to explore trade and investment in the country. Tourism is a potential area for both countries to explore. Iran offers a wide variety of attractions for travelers.

Iran provides a range of activities from hiking and skiing in the Alborz and Zagros mountains to beach holidays by the Persian Gulf and the Caspian Sea. Kish iland alone attracts around one million visitors a year.