The US sanctions have given Iran a rare opportunity to revive its textile and clothing industry. There is a big opportunity for existing textile and apparel plants to expand and for new entrants to set up shop. In addition the Iranian currency’s depreciation has provided an additional boon by cutting imports and smuggling, which are the nagging problem of the industry. Smuggled clothing costs Iran and its apparel producers heavily in lost revenues.

Textile and clothing accounted for 20 per cent of Iran’s economy in 1991. By 2009, this share dropped to three per cent. For more than 100 years until the early 1990s, the textile industry remained one of the largest sources of employment within Iran’s non-petroleum sector. The first industrialized textile factories were established in the 19th century during the Safavid dynasty. Despite remaining a cottage industry, textile production continued to play an important role in the economy. The industry consists of companies engaged in spinning, weaving, knitting, dyeing, and printing, and of finishing plants that process yarns from natural and synthetic fibers to produce a variety of woven and knitted fabrics. The major textile items are blankets, machine-made carpets, handmade carpets, serge, as well as fabrics and garments.