EXPORTING IRANIAN PHARMACEUTICAL PRODUCTS TO RUSSIA’S MARKET: POTENTIALS AND BARRIERS

Abstract

The pharmaceutical market is one of the most important and lucrative industries in the trade world. The expansion of non-oil exports and shifting away from the mono-product economy and its problems (high volatility in the oil market and, consequently, the country's revenue, as well as the issue of sanctions on Iran's oil sales by the West) have made it inevitable for Iran to expand its export of pharmaceutical products. Meanwhile, the Russian Federation, for historical reasons, has a high potential to become a destination for Iran's pharmaceutical products due to the geographical proximity of the two countries and the possibility of direct shipment of goods to Russia via the Caspian Sea, as well as due to the fact that Russia is a large consuming market with the population of 145 million and high volume of pharmaceutical imports (over $ 10.5 billion in 2018). The article analyzes the pharmaceutical export potential of Iran to the Russian Federation using the indicators of revealed comparative advantage index, cosine index and trade plan index. The findings of this study indicate the high potential of Iranian pharmaceutical products for export to the Russian consuming market and the lack of utilization and the neglect of the Iranian pharmaceutical manufacturers and exporters from the Russian market. As policy implications, the authors recommend making pharmaceutical products a priority for export to the Russian market, which will lead to more efficient use of Iran's productive potential.