Following years of tension that contributed to numerous conflicts throughout the Middle East, Iran and Saudi Arabia have made the decision to bring an end to their diplomatic disagreement and resume their respective diplomatic missions.
Chinese President Xi Jinping played a role in facilitating an unexpected agreement, which the United States was not directly involved in. In 2016, Saudi Arabia severed its ties with Iran following an incident where protesters stormed its embassy in Tehran.
On April 6, the Foreign Minister of Iran, Hossein Amir-Abdollahian, and Saudi Arabia's Foreign Minister, Prince Faisal bin Farhan Al Saud, held a formal meeting in Beijing, China. This marked the first gathering of the top diplomats from these two regional powers in more than seven years and was aimed at restoring their diplomatic relationship.
Officials from Saudi Arabia recently made a trip to Iran in order to engage in talks regarding reopening their embassy in Tehran, as well as their consulate in Mashhad. In addition, a technical delegation from Iran visited Saudi Arabia during the same week to make preparations for the reopening of Iran's embassy in Riyadh.
Saudi Arabia's Finance Minister, Mohammed Al-Jadaan, recently stated that his country is prepared to begin investing in Iran in the near future. Al-Jadaan emphasized the long-standing relationship between the two nations. He added that as long as both parties adhere to agreements that respect each other's sovereignty and do not interfere in one another's affairs, there should be no impediments to cross-investments and normalization of relations. The countries have also agreed to revive previous cooperation accords, including a "Security Cooperation Agreement" from 2001 and a "General Agreement for Cooperation" from 1998, which cover various areas such as trade, economy, sports, technology, science, culture, and youth.
According to recent reports, Saudia, the national flag carrier airline of Saudi Arabia, is preparing to commence scheduled flights to Tehran and Mashhad in Iran in the near future.
The recent trilateral meeting held in Yerevan between Armenia, Iran, and India aimed at exploring the potential for economic cooperation and regional communication channels. Among the issues discussed, the three countries focused on the prospect of boosting trade, especially by creating a new trade route that would connect the Persian Gulf to the Black Sea.
This proposed trade route would provide a direct corridor for Indian goods to be transported to Europe, which would avoid the longer route through the Suez Canal and reduce transport time and costs. The Persian Gulf-Black Sea corridor could also provide an alternative route for other countries in the region to trade with Europe, circumventing the traditional route through the Mediterranean Sea.
India's interest in this trade route is not only driven by the desire to reduce transportation costs but also by geopolitical considerations. As India seeks to diversify its sources of trade and investment, it is looking for new opportunities to engage with countries in the region, and Armenia presents itself as an attractive partner. India's engagement with Armenia could help it mitigate the impact of the ongoing tension between Russia and the West, which has led to the imposition of sanctions on Russia and affected India's relations with the West.
For Armenia, the proposed trade route offers a way to reduce its dependence on Russia as a trading partner and explore new avenues for economic growth. Armenia is currently a member of the Eurasian Economic Union, which is led by Russia, but its membership has not brought the expected economic benefits, and it is looking to diversify its trade partnerships.
Iran's interest in the project is rooted in its desire to connect with countries in the region and develop new trade routes. Iran has been exploring new opportunities for economic cooperation with Armenia, which has helped to reduce its isolation caused by the sanctions imposed by the US and the European Union. By collaborating with India and Armenia on the proposed trade route, Iran could leverage its strategic location and benefit from the increased trade and investment flows.
In recent decades, Iran has had a protective policy towards its internal auto industry. Accordingly, various limitations have been placed against importation of foreign cars. This policy has had its ups and downs but recently it has become stricter, as the concerns over currency exchange balance have increased. This protective policy has always had its fierce critics who believe, such a prolonged protection has not helped the Iranian auto industry to become more competitive and it has forced the consumers to pay unreasonably high prices for low quality cars.
After JCPOA was signed (and even before that), the Iranian government shifted towards a policy of joint venture agreements with foreign auto producers in order for the relevant know-how to be transferred to Iranian producers and in order to diversify the auto market. However, with JCPOA in shatters, most foreign producers left the Iranian market.
In a last-ditch effort, in recent months, the Ministry of Industry with authorization from the Parliament has liberalized the importation of used cars, including passenger automobiles, SUVs, vans, trucks, etc. The reasoning behind this policy was that, as used cars are cheaper it takes less foreign currency to import them and the auto market could be diversified at a lower cost. The importers of used cars do not need to observe the In a last-ditch effort, in recent months, the Ministry of Industry with authorization from the Parliament has liberalized the importation of used cars, including passenger automobiles, SUVs, vans, trucks, etc. The reasoning behind this policy was that, as used cars are cheaper it takes less foreign currency to import them and the auto market could be diversified at a lower cost. The importers of used cars do not need to observe the restrictions regarding transfer of know-how and any real person, even without a commercial card, may import a used car. The imported cars should not be older than 5 years and they should observe the quality and environmental standards set by the authorities.
Following years of tension that contributed to numerous conflicts throughout the Middle East, Iran and Saudi Arabia have made the decision to bring an end to their diplomatic disagreement and resume their respective diplomatic missions.
