Iran plans to set up its first apparel industrial town

Iran is the 36th biggest exporter of textile products and 90th biggest exporter of apparel in the world. Taking into account both textile and clothing products, the country’s ranking stands at 59th. With the aim of limiting imports, boosting domestic production and making the price of Iranian clothing more competitive, the country is now planning to set up a new apparel industrial town in Fashafouyeh, located in Tehran Province’s Rey County.

According to Director General of Textile and Clothing Department at the Ministry of Industries, Mining and Trade Afsaneh Mehrabi, some 45 hectares of land have been bought for the new apparel industrial park.

The Ministry of Industries, Mining and Trade has mandated foreign representatives, branches and distributors of apparel in Iran who seek business licenses to produce goods worth 20% of their import value (in rial terms) inside Iran and to export at least 50% of this domestic production. The initiative is aimed at increasing domestic production, creating jobs and reviving Iran’s aging apparel industry.

According to deputy minister of cooperatives, labor and social welfare, Hamid Kalantari, the apparel industry has the highest job creation potential among all industries in Iran.

Currently, 9,818 industrial units are active in Iran’s textile and apparel industries licensed by the Ministry of Industries, Mining and Trade, constituting 11% of all industrial entities in the country.

According to Mehrabi, these units have created more than 290,000 direct jobs, accounting for 13% of all industrial jobs in Iran, the ministry’s official news service Shata reported.

Mehrabi believes setting up apparel industrial parks is highly beneficial for Iran, as it leads to transfer of know-how, increases quality and lowers production costs.

Italian and Turkish apparel producers will be present there for cooperation with Iranian producers.

Last month, Iran’s Small Industries and Industrial Parks Organization, Minister of Cooperatives, Labor and Social welfare, Cooperative Investment Guarantee Fund, Iran’s Clothing Association and Tose’e Ta’avon Bank signed a multilateral memorandum of understanding to set up Iran’s first-ever apparel industrial park near Tehran’s Imam Khomeini International Airport.

Chairman of Iran’s Small Industries and Industrial Parks Organization Ali Yazdani said that the signing ceremony was held on July 12. Investors from Italy, China, South Korea and Turkey had already shown interest in this project.

According to the Headquarters for Combating Smuggling of Goods and Foreign Exchange, apparel tops the list of goods smuggled into Iran.
Textile, Apparel and Leather Industry Organization, affiliated to the Industries, Mining and Trade Ministry, had announced that some 90% of foreign garments are smuggled into the Iranian market.

In a bid to tackle the staggering rate of smuggling in the apparel market, the Islamic Republic of Iran Customs Administration recently banned any commercial import of clothing by individuals.

The administration issued a directive late last Iranian year (March 2016-17), based on which the import of clothing is only possible by registered companies and authorized representatives under the Industries, Mining and Trade Ministry regulations.

According to the Central Bank of Iran, clothing had a 4.5% share in the total Iranian families’ spending in the fiscal 2015-16. In other words, each Iranian family spent an average of 15,897,000 rials ($423) on clothes.

Iran’s per capita apparel consumption is lower than the global average.