New directive measures announced to revive Iranian apparel industry

The Iranian domestic manufacturers of apparel have been hard hit by excessive imports in recent years. To revive the Iran’s aging apparel industry, the Ministry of Industries, Mining and Trade has announced a new directive measures.

Under the new directive foreign representatives, branches and distributors of apparel in Iran seeking business licenses are required to produce goods worth 20% of their import value (in rial terms) inside Iran and at least 50% of this domestic production be exported.

The licenses issued as per the above condition will be valid for two years, with the possibility of extension if there are no violations.

The new regulations also aims at increasing domestic production, creating jobs and reviving apparel industry by importing up-to-date technology.

Earlier this month, in an interview with Financial Tribune, President of Trade Promotion Organization of Iran Mojtaba Khostrotaj said that foreign apparel producers and distributors must have registered official representatives and obtain the licenses before they can export their products into Iran.

As of this moment, they do not give permission for importing clothes because they have not registered any official representatives.

The head of Tehran’s Union of Garment Manufacturers and Sellers, Abolqasem Shirazi, stated that one of the goals they have in mind is to turn Iran into an apparel exporting hub in the Middle East.

According to the Headquarters to Combat Smuggling of Goods and Foreign Exchange, apparel tops the list of goods smuggled into Iran.

Some $2.6 billion worth of clothes are imported into Iran every year and according to members of apparel unions, twice this amount is smuggled into the country.

According to Director General of the Association of Iran Textile Industries Mohammad Mehdi Raeis-Zadeh, more than 90% of foreign brands sold in Iran are fake and only 25 to 30 brands have sales permits from the main companies and/or their representatives.

The Iranian apparel market is worth an estimated $12 billion per year.