An Iranian textile industry official has revealed that Iran's textile production costs are 30 per cent higher than the international standard, because of a variety of legal and administrative restrictions to production.

According to Fars News Agency, Jamshid Basiri, secretary of the Textile Industries Association, said the sector had so far received just $220 million of the $500m earmarked for the Foreign Exchange Reserve Fund, with 52 textile units having used the funds for reconstruction and renovation purposes.

Iranian industries are given the funds in US dollars, when in fact they need them in euros to spend in the European market. Basiri said that present state funds are not enough to carry out textile reconstructing programmes.

He also pointed to barriers caused by the Aggregate Tax Law - which means that producers will be forced to pay higher taxes this year as prices have increased - and the country's social security fees, which Basiri said are the highest in the continent.

Basiri also said the anticipated Chinese domination of the market when quotas expire as another threat to Iran's textile industry.