Iran Gives Go-Ahead For Ardebil Free Trade Zone On Border With Azerbaijan

By Chris Devonshire-Ellis

Opportunities for opening up to consumer markets in Armenia, Belarus, India, Kazakhstan, Kyrgyzstan, Pakistan and Russia

Akbar Behnamju, the Governor of Iran`s Northern Ardabil Province has said that the Iranian government have approved the long-awaited Ardabil Free Trade Zone near the border with Azerbaijan. The project had been delayed due to bilateral political differences and Azerbaijan’s involvement in a short war with Armenia.

Behnamju also pointed out the development of connecting Ardabil with other Iranian provinces through rail and revealed plans to link Ardabil with Gazvin and Rasht (Iran) and to Astara (Azerbaijan), also by rail. Ardabil can be expected to be linked to the International North-South Transportation Corridor (INSTC) which would allow goods and trade from Azerbaijan to pass through Iran and the southern ports at Bandar Abbas and Chabahar. That gives Azerbaijan access to China’s Belt and Road Initiative, to Pakistan, and to India’s West Coast, and vice-versa.

The Ardabil Free Trade Zone will offer duty free and bonded zone facilities, together with subsidized manufacturing and production costs in addition to foreign exchange facilities. It will allow Azerbaijani components to be mixed with components from Iran and from the Eurasian Economic Union (EAEU) countries of Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia as Iran has a free trade agreement with the EAEU.  Iran has also recently recommenced FTA discussions with Pakistan.

Azerbaijani imports from Iran reached US$300.62 Million during 2020, according to the United Nations COMTRADE, with gas, related energy products, plastics, ceramics, and consumables such as vegetables and fruits leading the way. Iran imports petroleum, cotton, and perfumes in trade worth about US$50 million, meaning there is plenty of room for expansion.

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