The Spread of Smuggled Goods in the Market; The Failure of the Household Appliance Import Ban Policy

A member of the Industries and Mines Commission of the Islamic Consultative Assembly, on Sunday, March 10, pointed out the free sale of smuggled goods in the market, stating that "this policy is unsuccessful and needs reform." According to the government news agency ILNA, Mostafa Pourdehghan criticized the current market situation, saying: "Smuggled household appliances are being sold freely, while imports are officially banned. This situation has led to a loss of value and made it difficult to monitor the quality and price of goods." Pourdehghan warned that support for domestic production should not be permanent, and if this trend is not corrected, the parliament will reconsider the import ban policy. He also announced the possibility of revising the import ban on household appliances, stating: "The Industries Commission has emphasized in its meetings with domestic producers that this support cannot be permanent. If this policy is not reformed, there will certainly be changes in it." This member of parliament further noted in reference to closed sessions of parliament with Masoud Pezeshkian that "members of parliament have explicitly stated that the smuggling issue must be resolved once and for all, as its consequences for the country's economy and the health and security of the people are extensive and damaging." He criticized the import ban policy on household appliances, emphasizing that import bans are uncommon worldwide and should ideally be temporary. According to him, this policy should be accompanied by increasing import tariffs and creating opportunities for the growth of domestic production, rather than a complete market blockade that leads to reduced quality, increased prices, and monopolization. The restrictions and bans on the import and sale of foreign brands in the Iranian market, which have been implemented under the pretext of "supporting domestic production," have not only failed to strengthen domestic production due to the impact of other policies, including monetary and financial policies, but have also led to a decrease in the quality of domestic products and a boom in the smuggling of foreign goods into the country. In October 2021, Ali Khamenei issued a ban on the import of household appliances to prevent the adverse collective consequences of individual decisions in the economy from crippling the people. This order, issued at the request of Ali Khamenei, was implemented after the initial resolution of the "Economic Coordination Council of the Heads of the Branches" declared the import of household appliances banned until the end of 2021 due to currency restrictions since 2018. Following the potential release of Iran's blocked funds in South Korea, a group of household appliance manufacturers requested the Supreme Leader to support them against the potential "opening of imports" of household appliances from certain South Korean companies. Since 2018, the import of household appliances has been declared banned until the end of 2021. After the expiration of this resolution, it was expected that, considering market needs, the import of this product would be allowed. However, the Ministry of Industry, Mine and Trade announced that producers, numbering over 1500 small and large units, could meet market demand and even have export plans. Therefore, the import ban on household appliances was once again extended. The market is in a coma; an analyst: "The government is not normal," shops are closed. The transfer of Iran Khodro to the "private sector"; an expert: it is semi-privatization. The increase in potato prices alongside a 20% rise in the prices of imported household appliances.