The economic and political relations between Russia and Iran are developing at an incredible speed. Lifting of sanctions from Iran, complex relations between Russia and the West, the Russian-Turkish conflict, the U.S. attempts to prevent the strengthening of the Islamic Republic in the international arena, currency perturbations - all this has influenced and predetermined not only the very fact of rapprochement of the two countries, but also the pace at which the representatives of the Russian and Iranian authorities began to shake hands. The states, which will be discussed in the column "Made in Russia", have a long and complicated history of relations. Experts are cautiously predicting the prospects for development. However, intersection points have already been outlined, priorities have been set, and the business of Russia and the Islamic Republic of Iran is already ready to sign contracts for exporting goods.

History of development of Russian-Iranian trade relations

Russia and Iran have longstanding, albeit unstable, relations. The Persian state was one of the key trading partners of the Russian Empire: in 1913 it accounted for 3.8% of Russian exports and 3.3% of imports.

Much attention was paid to the development of trade relations with Tehran in the USSR. The Leningrad Mint, for example, minted a Persian silver coin for Iran in 1921 - 1927 in considerable quantities (only from November 1925 to June 1926 - 6 304 522 pieces).

Active bilateral trade between the USSR and Iran was conducted during World War II. In 1943 the countries concluded an agreement that Iran exported 36 thousand tons of rice to the USSR, importing Soviet industrial goods (mainly cotton fabric). In 1946 Iran was in the center of the crisis, which was connected with the attempt of the USSR to keep its own troops on its territory. The USA became one of the key actors in resolving the crisis in such a way that Moscow lost a number of positions in Iran. The oil concession promised to the USSR was not granted, and the mining authorities were able to defeat the pro-Soviet rebels of Iranian Azerbaijan.

The situation began to change at the beginning of the XXI century. Thus, in May 2004 Russia acted as an intermediary in signing the agreement on gas supplies to Armenia by Iran. Fuel was supplied to the thermal power plant in the town of Hrazdan through the new Iran-Armenia gas pipeline, as due to the unstable situation that was connected with the revolution in Georgia, Russia could not guarantee uninterrupted gas supplies to Armenia.

At the end of 2005, Russia became Iran's seventh most important trading partner, exporting more than 5% of its total supply to Iran. For the first time the trade turnover between the countries exceeded $1 billion.

Credit History

In November 2015, negotiations held in Moscow resulted in an agreement to provide Iran with a $7 billion loan for infrastructure projects. At the same time, $5 billion will be used to develop industrial exports from Russia, as well as to boost infrastructure projects. The initial amount of the loan should reach $2.2 billion in 2016, said Shuvalov, specifying that 2.2 billion is the amount of funding for the construction of power plants and electrification of Iranian railways. These papers have already been signed during the visit of Russian President Vladimir Putin.

The remaining $2.3 billion of credit funds may be used to purchase Russian power units for a nuclear power plant being built in Iran. In autumn 2014, Iran and Russia signed the largest deal in the world in recent years to build eight power units. It should bring tens of billions of dollars to our country. The funds will also be used to expand exports of domestic military equipment: Russia is already supplying Iran with air defense and radio electronics.

Free Trade Zone

In February 2014, Iran addressed the Eurasian Economic Commission with a request to establish a free trade zone with the EAEC member states, said the head of the Ministry of Industry and Trade Denis Manturov in an interview with TASS. Last December, as part of the Supreme Council of the Eurasian Economic Commission (EEC), President Vladimir Putin instructed to form a research group on the establishment of a free trade zone with Iran, as told journalists by First Deputy Prime Minister Igor Shuvalov.

The result of the group's work should be a report, on the basis of which a decision on the feasibility of a free trade agreement with Iran will be taken.

At the same time, the EEC intends to consider the issue of reducing duties on agricultural products from Iran in an accelerated mode - during the first months of 2016, which is a marker of how important relations with Iran are for Moscow.

In turn, Iran is actively trying to gain a foothold in the Russian market in the light of the product embargo imposed by Russia on Western countries and Turkey.

The Iranian side has previously been able to export fish and seafood to Russia. Iranian premium class shrimps from the Persian Gulf were the first to enter the Russian market in January 2016, followed by Iranian lobsters, as well as delicious trout breeded in fish farms near Tehran. This year Iran plans to supply Russia with 20 thousand tons of high-quality trout and 5 thousand tons of shrimp and seafood, as well as black caviar and valuable fish varieties.

At the same time Rosselkhoznadzor is actively working on accreditation of Iranian producers of poultry meat and dairy products. The first deliveries of poultry were to begin after January 20, 2016, after February 15, Iran will start exporting dairy products (including cheese), said the head of Rosselkhoznadzor Sergei Dankvert to the press.

Iran has made a statement that it's ready to export at least 10 thousand tons of poultry meat per month, or 120 thousand per year, or even more, if necessary. However, Russia itself provides for its own poultry meat almost completely. Imports of chicken meat is about 200 thousand tons per year. Iran is planning to take this part of the market from Belarus and Brazil. Iran can supplant American suppliers by starting deliveries of hatching eggs for breeding purposes.

The Russian side, according to Manturov, puts the main emphasis on the supply of high-tech products - above all, planes. "We are counting on the supply of SSJ 100 airliners. We also look forward to the possible participation of Iranian aircraft infrastructure in the production of components for our MS-21 aircraft with the subsequent purchase of this airliner. Negotiations continue on other civil sectors of industry - in particular, automotive, power engineering," said the head of the Ministry of Industry and Trade.

On the previous day it became known that the Veterinary Organization of Iran announced that Russian meat had successfully passed the veterinary inspection. Thus, Russian red meat will be supplied to the country in full compliance with medical standards.

There are no obstacles in the organization of export of Russian meat products to Iran; the task at the new stage is to offer it to Iranian buyers.

The key supplier of red meat to Iran will be the Russian company Miratorg. The beef will be exported from the Bryansk meat processing plant. Iran has also announced that it is ready to buy milk and venison from Russia.

Military and Technical Partnership

Another news item at the end of January was the news that Russia and Iran signed an agreement on military cooperation. The document was signed by Defense Ministers Sergei Shoigu and Hosein Dehkan.

At the press conference after the negotiations Shoigu told about what will include military cooperation: more intensive exchange of delegations, staff negotiations, sending observers to the exercises, training of military personnel, exchange of experience in peacekeeping activities and fight against terrorism, visits of warships to ports of Russia and Iran.

Hosein Dehkan noted that Russia and Iran should jointly confront some foreign forces operating in the Middle East.

Terms of trade

An important step to facilitate and expand bilateral trade cooperation was the opening of a joint bank account between Iran and Russia. "Iran has completed preparations for the creation of a joint bank account with Russia to facilitate trade between the two countries in their national currencies," said Iranian Central Bank head Valilla Saif. He is confident that such an account will become a mechanism to connect the banking sectors of the two countries to the development of trade and economic exchange.

Equally important is the fact that Russia and Iran support transactions in their national currencies. The Russian Export Credit and Investment Insurance Agency (EXIAR) has agreed with its Iranian partners on mutual guarantees for transactions in national currencies, TASS reported with reference to EXIAR Director Alexei Tupanov. This insurance coverage for export and investment transactions protects against commercial and political risks. "We agreed with him on exchange of risks. If we have projects in Iran, they can guarantee them for us, and vice versa. We are going to start such a scheme with them now. For now we will start with small amounts of $10-20m," Tupanov said.

February 1, it became known that the adviser to the head and spiritual leader of Iran Ali Akbar Velayati flew to Moscow for a series of meetings with senior officials of the Russian Federation. During the talks in Moscow, among other things, the issue of Iran joining the Shanghai Cooperation Organization (SCO) will be discussed, which is welcomed by Russia and China, Velayati said. So far the Islamic Republic has been represented in the organisation as an observer country. According to the SCO charter, a state that is under international sanctions imposed on the basis of UN Security Council resolutions may not become an SCO member. With the beginning of implementation of the nuclear agreement, the Joint Comprehensive Action Plan (JAP) between Tehran and six world powers (five permanent members of the UN Security Council and Germany), announced in Vienna on 16 January, the UN Security Council resolutions were terminated, which opens the way for Iran to join SCO.

The entry of SCO for Iran is important for at least three reasons. First, it is a way for the country to get out of the international political isolation actively encouraged by the US against the Islamic Republic. Second, membership in the SCO is one of the tools for developing the country's economy through participation in regional infrastructure projects. Third, it is an additional opportunity to confront threats to the country's security: cross-border crime, primarily drug trafficking, extremism, terrorism and separatism.

Thus, Russia, in view of the need to develop non-resource exports, and Iran, which wants to go "out", are determined to maintain stable partnership relations, which means: we will regularly see news about new agreements and mutual supplies from both countries.

Irina Zhuravleva