Iran’s growing reliance on a narrow group of trade partners for essential imports is emerging as a structural vulnerability for its economy. Despite efforts to expand commercial ties, more than 74% of the country’s total imports in the last fiscal year (which ended on March 20) came from only three countries—United Arab Emirates, China and Turkey—highlighting the limitations imposed by sanctions and restricted access to global markets.
According to official trade data, Iran imported 39.2 million tons of goods valued at $72.3 billion in the previous year. The UAE ranked first with $21.9 billion (30.3%), followed by China with $19.3 billion (26.7%) and Turkey with $12.4 billion (17.2%). Germany and India completed the top five import sources, bringing the total share of these countries to nearly 80% of Iran’s import basket.
This concentration continued in the first half of the current year, although import values declined due to lower global prices and limited foreign exchange access. During the first half of the current Iranian year, the country imported $28.4 billion worth of goods—down 15.3% year-on-year—while volumes increased slightly to 18.8 million tons. The UAE, China and Turkey again dominated the supply of goods, accounting for over 73% of total import value in this period.
At the core of the issue is Iran’s dependence on imported intermediate goods and machinery, which make up more than 80% of its import basket. These commodities feed directly into domestic production processes—from manufacturing and petrochemicals to pharmaceutical inputs and consumer staples. Any disruption in diplomatic or financial relations with key suppliers would therefore impact production chains, consumer markets and economic stability.
Experts warn that this dependency is not only a result of market preference but is largely imposed by sanctions. Former Trade Promotion Organization head Valiollah Afkhami-Rad argues that Iran is “forced to procure its needs from a limited set of countries” because decades of Western sanctions have hindered access to diverse suppliers and competitive pricing. He notes that while neighboring states, China and India continue trading with Iran, they are doing so primarily for economic advantage rather than strategic alignment.
Afkhami-Rad also highlights a parallel vulnerability on the export side. Iran relies heavily on a few regional markets—particularly Iraq—for non-oil exports. However, as Iraq develops its industries and imposes protective tariffs, Iranian exporters may face declining market share. This pattern could be replicated by other partners as they protect their domestic industries.
Mohammad-Reza Modoudi, another former trade official, echoes these concerns, stressing that sanctions have reduced Iran’s bargaining power and left it dependent on a limited number of suppliers who now enjoy leverage in pricing and contract terms. He warns that if geopolitical tensions escalate or if these trading partners adjust their policies under external pressure, Iran could face shortages of essential goods and production disruptions.
Modoudi notes that Iran’s commercial geography has shrunk significantly since the early 2000s, when European companies played a major role in supplying industrial goods. The reimposition of UN and US sanctions has pushed European firms out, further narrowing the country’s options. With the recent revival of UN sanctions under the snapback mechanism, he expects no improvement in diversification.
Both experts underline that the only sustainable path to reducing vulnerability is through diplomatic de-escalation and reintegration into global trade frameworks. Enhancing the role of free trade zones and empowering economic diplomacy through Iranian embassies could help identify alternative partners and bypass trade restrictions. However, they question whether the current political and bureaucratic system has the capacity or willingness to take such steps.
