An import is any commodity brought into one country from another in a legitimate manner, typically for trade purpose. The import of commercial quantities of goods normally requires involvement of the customs authorities in both the countries of origin as well as destination.
According to the Persian daily Qods, electronic trading has largely bypassed the involvement of customs in many countries and represents a significant share of the gross domestic product (GDP) in many developed countries.
While international trade was conducted throughout history (for instance, via the Silk Road), its economic, social and political significance has become more evident in recent decades.
Industrialization, multinational ventures and outsourcing are all having a major impact on international trade, which is considered as the prime manifestation of globalization.

Trade Balance
Media reports indicate that Iran’s trade balance still favors exports, which means the country exports more than it imports. However, international financial institutes such as the International Monetary Fund and The Economist have released dim forecasts about Iran’s trade balance.
Iran is expected to import goods worth more than $45 billion in the current Iranian year (started March 21) and its trade balance might for the first time turn negative in the next three years. A negative trade balance is known as trade deficit or, informally, a trade gap.
The important point with regard to import is that they are influenced by the foreign currency earned from crude oil export, which could change in light of price fluctuations. This is while non-oil exports reached $16 billion this year, which is almost equal to one-third of the monetary value of what it imports.
Trade balance is the difference between the monetary value of exports and imports over a certain period of time. A positive trade balance is known as a trade surplus and consists of exporting more than importing while a negative trade balance is known as a trade deficit.
Trade balance is also the difference between what the country produces and what it spends. Therefore, even if the country decides to ignore oil revenues in its foreign trade, its economy will still face trade deficit, despite positive signs of a future rise in the monetary value of non-oil exports.

Deficit
Factors such as production cost, exchange rates, trade agreements, barriers, tariffs, regulations and business environment at home or abroad can affect trade balance.
In export-led growth, trade balance will improve during a period of economic growth. However, with domestic demand-led growth, trade balance will worsen, which could be the case in Iran.
As mentioned earlier, one of the factors that affect trade balance is barriers, which are generally in the form of government laws, regulations, policy or practices that either protect domestic products from foreign competition or artificially stimulate exports. The most common foreign trade barriers are government-imposed measures and policies that restrict, prevent or impede the international exchange of goods and services.
An increase in non-oil exports this year could act like a two-edged sword--it can boost domestic production by attracting investment and intermediary goods, also with positive impacts on exports. However, if these imports are to be consumer goods, they could severely impact domestic manufacturing companies.
Most economists do not believe that trade deficits are inherently good or bad, but that they should be judged on the basis of circumstances in which they arise. Large imbalances may sometimes be a sign of underlying economic problems or rigidities.
In order to offset a negative trade balance, it must be financed either by revenues earned or transfers, or by reducing the country’s net international assets. This may be done for example by selling assets, through foreign direct investments or by international borrowing.
However, a trade deficit may lead to higher consumption in future if, for example, it is used to finance profitable domestic projects that generate returns in excess of that paid on the net foreign liabilities.
Trade imbalances are not always indicative of the smooth operation of the market, despite differences in international productivity and consumption preferences. Trade deficits have often been associated with a loss of international competitiveness, or unsustainable booms in domestic demand.
Similarly, trade surpluses have been associated with policies that inefficiently guide a country’s economic activity towards external demand, resulting in lower living standards.

An increase in consumer imports, will undermine the national economy and hurt living standards.

Impact
Ahmad Rousta, a board member at Tehran’s Shahid Beheshti University, noted that a boost in import of investments and intermediary goods, based on development strategies and socioeconomic plans, in favor of exports is welcome.
However, he believes that an increase in consumer imports, because of the increase in oil revenues, will undermine national economy and lower living standards.
Based on the official statistics released over the past six months, most imports concern investment and intermediary commodities, although a considerable amount of consumer goods have also found their way into the domestic markets.
Without a crystal clear policy for the Foreign Exchange Reserve Account, there is this danger that oil revenues might be spent on non-productive and end-user projects and in the form of destructive imports.
The import of consumer goods is detrimental to domestic producers and an increase could even discourage investments in the production sector.
According to Rousta, a rise in imports is always directly linked to the rise in crude oil export revenues, particularly when it happens all of a sudden like over the past three years.
Since the country lacks the necessary capacity and the means to make optimum use of these huge revenues, there is this danger that they might be spent wrongly. Under the circumstances, even if such spending has short-term positive effects, it could still have devastating impacts on the society.
The best approach would be to wisely spend oil money on economic infrastructures as well as sectors that produce export goods; otherwise a drop in oil prices could undermine the national economy.
According to the university lecturer Rousta, nations without efficient development strategies and plans tend to spend and waste their national resources without any concern. Sadly, this is true about Iran. The country lacks strategic plans for its foreign exchange revenues and has no idea how it should spend them efficiently and wisely.

Challenges
Investment goods are commodities that help increase the output of goods and services in future, providing producers with satisfaction at a later date.
Hadi Ghanifard, the head of Iran’s Chamber of Industry and Mines, noted that imports benefit the international mafia and foreign goods traders.
Imports have risen sharply in recent years, although oil revenues must be used to build factories, create new jobs and generate added-value.
According to the official, domestic markets have been flooded by substandard foreign goods ’worth’ billions of dollars that could have been easily spent on creating new jobs.
He blamed the previous government for the rise in worthless foreign imports, arguing that the former administration cut down import tariffs and allowed importers to bring in more useless goods simply because it made economic sense at the time.
Ghanifard also said that the government changes petrodollars into rials to spend them against its current expenditures, which is like handing them over to the importers. This is because petrodollars are largely used to import goods.
According to him, the country earned $30 billion in crude oil exports over the past few months and a large part will be spent on importing foreign goods.
If major industries were to lose to foreign competition, the loss of jobs and tax revenue will severely impair the national economy. Protective tariffs have been used as a preventive measure, which also have disadvantages. The most notable is that they increase the price of the good subjected to the tariff, disadvantaging consumers or manufacturers who use that good to produce something else.
Unregulated imports will destroy the economy and the Commerce Ministry should take effective measures to control the situation by imposing higher tariffs on foreign goods. Unless restricted, they will lead to capital flight, higher unemployment and, more importantly, a weak economy and production sector bankruptcies.