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Iran’s apparel park aims at limiting imports

An apparel park is coming up in Iran. The aim is to limit imports, boost domestic production and make the price of Iranian clothing more competitive. The park will be open to business units to produce goods worth 20 per cent of their import value inside Iran and to export at least 50 per cent of this domestic production.

Currently, 9,818 industrial units are active in Iran’s textile and apparel industries. These units have created more than 2,90,000 direct jobs, accounting for 13 per cent of all industrial jobs in Iran. Iran’s apparel exports during the first half of the current year grew 24 per cent in value compared with the corresponding period of last year. In the last fiscal year exports were up 3.9 per cent in value year-on-year.

Imports of apparel fell 2.24 per cent in terms of value. Import tariffs on apparel are set at 55 per cent. On top of that, importers are made to pay a nine per cent value-added as well as an additional four per cent tax.

However, a vast amount of apparel is smuggled into Iran. In fact, clothing tops the list of goods smuggled into Iran. Iranian apparel production meets 40 per cent of domestic demand. Iran’s annual apparel demand stands at around 5,10,000 tons a year while the country’s production capacity is about 3,20,000 tons.