Beginning in the late 1980's, Iran began to try and exploit the capabilities of her new defense industrial base to provide products and services to the international arms market. Retrofits, upgrades, and overhauling existing equipment was a primary service, moving toward the sale of completed systems with time. Rockets and artillery and defense electronics were target areas of sales. At an international arms show in Gabon in 1989, Iran offered several missiles, an APC, several mortars, and communications equipment. Subsequently Iranian products have been displayed at other arms shows.
Iran has taken initiatives to exploit the relaxation of tensions between the Arab states to expand her international arms sales. Iran has made limited sales of armaments to the African countries (e.g., Katyusha 122 mm multiple launchers to Sudan). However the larger objective is to establish Iran as a provider of technical services, and armaments, to the Arab Gulf states. In 1999, Iran dispatched a defense industry delegation to International Defense Exhibition in Abu Dhabi that included producers of electronics, missiles, ordnance, aircraft, and small arms. However Iranian leadership believes that it may take 5-10 years to establish a market. If relations with the West continue to improve, Iranian defense companies would also like to establish partnerships with Western companies that would provide assistance and technology that would allow Iranian production of equipment to meet Western military standards.
Defense industrial transformations to improve competitive positions on the world market have not yet materialized in Iran. If her arms export objectives continue, there will probably need to be significant changes of the kind that have been underway in other countries if Iran is to be competitive, even in Third World markets.
Iran is entering the arms export market for the reasons many other countries have: to reduce costs and reduce excess capacity. As a late entrant, Iran may easily find that this is not a viable market, even for ballistic missiles. If this happens, there could be severe tensions between the cost of Iran's defense industrial base, Iran's overall economic situation, and Iran's goal of self-sufficiency in armaments production. Prevailing oil prices, a situation not under Iran's direct control, may be the factor that will determine how Iran will be forced to resolve the tensions.
In 1997 Iran's arms export level was only $30M (1997$US), compared with $23M (1997$US) in 1991. This placed Iran 31st globally.
By 2008 Iran's defense industries claimed to offer a wide variety of armaments, spanning from watercraft to armored vehicles, from rockets to small arms ammunitoin, and from artillery to missiles. Most of the equipment was offered for export, though by 2008 reports of sales to Sudan in 2002 (Boragh APCs) and Sri Lanka in 2005 (surface-to-air missiles and patrol boats) constituted the only potential sales.
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