The Bangladesh mission in Iran has suggested that Bangladesh initiate direct shipment of goods to the south-western Asian country through the sea route, aiming to increase bilateral trade volume.
It has also recommended exporting Bangladeshi products, especially apparel and leather goods, to Iran using its free zones, said officials.
The mission has emphasised the need for forming a Bangladesh-Iran Joint Commission of Commerce, comprising chambers of commerce of both the countries.
It mentions that different Iranian chambers of commerce have already expressed interests in forming the joint commission.
The embassy has recently sent a report to the commerce ministry to take necessary steps in this connection, an official confirmed to The Financial Express last week.
The mission has advocated organising 6th joint economic commission meeting to make effective the preferential trade agreement (PTA) between Bangladesh and Iran that was signed in 2006 with a view to getting further trade benefits from Iran.
According to the embassy report, the Ports and Maritime Organization (PMO) of Iran has expressed an interest in a memorandum of understanding (MoU), to be signed between Chittagong Port Authority and Iran's Shahid Rajaee Port. The proposal has already been sent to the commerce and foreign ministries.
There is a huge potential to increase Bangladeshi export earnings from the Iranian market despite sanctions against Iran imposed by the United States and different international entities.
Currently, there is a demand for RMG, seasonal fruits, tea, paper and cardboard, jute goods, wet-blue and crushed leather in the Iranian market. The footwear and leather association of Iran is interested in importing leather from Bangladesh as there is no sanction on raw leather.
In this regard, the mission has already communicated the issue to the commerce ministry and Bangladesh Tanners Association.
According to the mission's letter, an Iranian company has proposed buying six ro-ro ships and hiring a cruise ship from Bangladesh.
This is to mention that the Iranian government has slapped an import ban on 2,500 'non essential' items since 2018, in order to encourage domestic products after economic sanctions imposed by the US.
As a result, it is not possible to export a good number of Bangladesh products, including RMG and leather goods, directly to the Iranian market. But, it is possible to export all Bangladeshi items through the nine free zones in Iran as the sanctions are not effective there, added the report.
Despite the economic embargo, Bangladeshi trade transaction is going on with the Muslim country and there is a huge opportunity lies ahead.
Iran imported Bangladeshi products worth US$40.14 million in the Iranian fiscal year 2020-21, according to the Trade Promotion Organization of Iran and Iran customs administration.
In the fiscal year 2020-21, RMG products worth $1.8 billion entered Iran through informal channels. Of the items, one third of the RMG item is Bangladeshi produced, as per the data of RMG exporters and manufacturers association of Iran.