Iran is moving ahead with a major border development aimed at strengthening trade with Iraq. The Qasr-e Shirin trade zone is gaining new infrastructure and investment plans. Officials hope the project will create a stronger commercial link between western Iran, Iraq, and the Kurdistan Region.
The development stretches along roughly 186 kilometers of Iran’s border with Iraq. It covers more than 7,220 hectares between the Parviz Khan and Khosravi crossings. The location gives the project direct access to important trade routes serving Iraqi markets.
Reza Qobadi Mehr, the project’s chief executive, said construction remains a major priority. Workers are building perimeter fencing and completing essential infrastructure across the zone. Commercial and customs facilities also require additional work before full operations can begin.
Officials expect the completed facilities to encourage greater private-sector participation. They also want to attract major vehicle manufacturers and other specialized companies. These businesses could expand industrial activity while increasing trade through western Iran.
The administration plans to hold the second phase of a vehicle-import tender in September. Authorities launched the first phase in May and approved 22 companies. The next stage should bring additional businesses into the development and strengthen its commercial network.
The project will also connect the area with wider regional logistics systems. Authorities plan to expand the zone to include the urban area of Qasr-e Shirin. A planned one-stop commercial center will support exports, imports, and transit operations.
The Qasr-e Shirin trade zone could therefore become an important gateway for goods moving between Iran and Iraq. Its proximity to established crossings gives businesses access to existing trade channels. Officials also expect improved logistics to reduce obstacles for companies operating across the border.
Trade between Iran and Iraq has remained significant in recent years. Bilateral commerce reached approximately $12 billion in 2023, according to the Iran-Iraq Joint Chamber of Commerce. The figure increased to about $12.5 billion in 2024 before formal exchange reached roughly $12 billion in 2025.
The new development comes as both countries seek to expand economic ties. Iran can use the project to reach Iraqi consumers and regional markets more efficiently. Iraq, meanwhile, could benefit from additional supply routes and stronger commercial infrastructure.
Still, the zone faces several steps before reaching full capacity. Authorities must finish basic construction and customs facilities first. The success of the Qasr-e Shirin trade zone will then depend on investment, logistics, and sustained demand from regional businesses.
If implementation stays on schedule, the project could reshape trade activity along Iran’s western frontier. It may also give companies a new platform for imports, exports, manufacturing, and transit. For both countries, the development reflects growing efforts to deepen economic cooperation