Persian Files ISSN 2975-0598 Volume 26 Issue 1
Author: Silvia Boltuc
Executive Summary
This report assesses the opening of the Iran Trade Centre in Yerevan, Armenia, on October 1st, 2024. The centre represents Tehran’s largest permanent trade facility abroad, aimed at facilitating economic engagement with the Armenian and Eurasian Economic Union (EAEU) markets.
This analysis, derived from publicly available local and international sources, as well as previous on-the-ground information collected by SpecialEurasia, evaluates the geopolitical and geoeconomic implications of this development, particularly in Armenian-Iranian relations and regional dynamics in the South Caucasus.
Background Information
The Iran Trade Centre in Yerevan, spanning over 18,000 square metres, is the first permanent Iranian trade facility abroad. It includes a 10,000 square metre exhibition area with 107 booths, enabling Iranian businesses to showcase their goods, conduct business meetings, and engage in business-to-business activities.
The initiative is part of the Iranian broader strategy to penetrate the EAEU markets, with the centre offering various services, such as financial transfers, logistics, legal advice, and customs support.
Armenia’s membership in the EAEU and its geographical proximity to Iran make Yerevan an ideal gateway for Iranian businesses to access a broader regional market.
The centre’s role extends beyond bilateral trade and encompasses other areas as well. This project aligns with Tehran’s strategy to bypass the impact of international sanctions and diversify its economic ties.
Geopolitical Scenario
The establishment of the Iran Trade Centre in Armenia underscores the evolving geopolitical alignment between Tehran and Yerevan. Historically, the two nations have shared a pragmatic relationship, driven by shared geopolitical interests and economic necessity.
Armenia, landlocked and dependent on stable trade routes, has sought to maintain balanced relations with its neighbours, particularly considering its complex relations with Azerbaijan and Turkey. Iran, meanwhile, sees Armenia as a critical partner in its efforts to gain access to the EAEU and offset the effects of Western sanctions.
In recent years, Iranian-Armenian cooperation has intensified, particularly in the trade, energy, and transport sectors. The Islamic Republic has consistently supported Armenia’s access to alternative trade routes, particularly during periods of heightened tension in the South Caucasus.
Tehran’s creation of the trade centre aims at increasing its economic and political influence in the region and strengthening its role as a regional economic player.
The Iranian opening of the trade centre coincides with a period of notable geopolitical changes in the South Caucasus, notably marked by Azerbaijan’s decisive military victory in Nagorno-Karabakh/Artsakh in September 2023 and the deteriorating relationship between Armenia and Russia.
Armenia’s relationship with Russia has witnessed serious problems, particularly within the framework of the Collective Security Treaty Organisation (CSTO), and Yerevan is increasingly seeking to diversify its alliances, especially looking at the United States. Iran’s trade centre serves to bolster Yerevan’s efforts to diversify its economic ties, but it is also a Tehran’s effort to counter and diminish the rising Western presence in the South Caucasus republic.
The opening of the trade centre ties into Iran’s broader regional ambitions, particularly considering the Armenia-Iran-India transport corridor. This initiative seeks to utilise key Iranian ports to facilitate faster trade routes between India and Armenia. The corridor further strengthens the trilateral cooperation between Iran, Armenia, and India, giving Tehran greater leverage in regional transport and logistics infrastructure while reinforcing its status as a key transit hub.
Iran’s geopolitical motivations in establishing this centre are not only economic but also strategic. By reinforcing its economic presence in Armenia, Iran seeks to counterbalance the influence of Turkey and Azerbaijan in the region.
Tehran has been wary of Ankara’s growing influence in the South Caucasus, particularly following Azerbaijan’s military successes in Nagorno-Karabakh, and views stronger ties with Armenia to preserve its regional clout.
The centre also reflects Iran’s response to international sanctions, particularly those imposed by the United States. By deepening its involvement in the EAEU through Armenia, Iran can bypass traditional sanctions regimes and develop alternative markets, reducing its vulnerability to Western economic pressure. This move is consistent with Iran’s broader foreign policy aim of countering isolation by expanding its regional influence.
Conclusion
From a geoeconomic perspective, the opening of the Iran Trade Centre in Yerevan represents a strategic diversification of Tehran’s economic interests. By using Armenia as a springboard into the EAEU, Iran gains access to new markets with fewer restrictions than those imposed by Western sanctions.
This development is likely to enhance Iranian exports, particularly in industries such as petrochemicals, construction materials, and agriculture, since these sectors that are critical for Iran’s economy.
For Yerevan, the project also fits within Armenia’s broader efforts to diversify its economic and political alliances, reducing its dependence on traditional partners and creating new avenues for economic growth.
Amidst the ongoing geopolitical uncertainty in the South Caucasus, the Iran Trade Centre has the potential to play a pivotal role in the region’s developing economic dynamics, facilitating greater regional integration and enhancing Iran’s position as a key economic player.
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