Wrapping up his four-day trip to Italy and France, Iranian President Hassan Rouhani on Thursday added French automaker PSA Peugeot Citroën and aircraft giant Airbus to a growing profile of European companies seeking to return to Iran.
The quick bids for footholds in Iran — less than two weeks after international sanctions were rolled back — reflect the eagerness in Europe to tap into the large Iranian consumer market and get a head start on potential rivals from the United States and elsewhere.
But the multibillion-dollar deals carved out in Italy and France have also stirred opposition from rights groups and activists. Some claim that Iran’s crackdowns on political dissent, its anti-Israel diatribes and other internal pressures, such as rising executions, should be addressed as part of any new business outreach.
Most international sanctions on Iran were lifted earlier this month under a pact with world powers that reined in Tehran’s nuclear capabilities. At the same time, under a separate arrangement, the United States freed or cleared 21 Iranians in U.S. sanctions-related cases, while Iran released five American prisoners, including Washington Post journalist Jason Rezaian.
Rouhani, accompanied by a 120-member delegation of political and commercial leaders, pointed to the business deals as validation of his push for the nuclear accord, which angered some hard-liners in Iran who saw it as too great a concession to the West.
In France, Peugeot announced a joint venture with carmaker Iran Khodro to produce 200,000 cars a year at a plant near Tehran that will also get an upgrade. Peugeot had a major stake in Iran’s car market before sanctions.
Airbus, meanwhile, said it reached a deal to sell 118 aircraft to state-run Iran Air, including 12 A380 super-jumbos. It gives the Boeing rival a significant jump back into a market in desperate need of new planes. On some routes, Iran continues to fly Boeing models built before the 1979 Islamic revolution.
French Prime Minister Manuel Valls said other agreements were expected in the health, agriculture and environment sectors, without giving further details. France’s state rail company, SNCF, also announced a deal with Iran.
A French diplomatic source, cited by the Reuters news agency, placed the total value of the French pacts at $16 billion. If confirmed, that would bring the total agreements during Rouhani’s trip to more than $33 billion.
The attraction of the Iranian market is clear. The country, with about 80 million people, has a young and well-educated population, and its middle class is among the most vibrant — and product-hungry — in the region.
“Iran’s needs are enormous,” said Pierre Gattaz, head of France’s Medef employers association. “The country is not starting from scratch. It’s got a very educated workforce, a real development potential.”
In Italy, companies including steel and industrial firms signed a total of about $18 billion in deals with Iran during Rouhani’s visit.