Iraqi government restrictions halt Kurdistan Factory outout with industry facing economic fallout

ERBIL – Factories in the Kurdistan Region have been unable to export goods to central and southern Iraq for 20 days due to restrictions imposed by the Iraqi government, leading to calls for intervention from the Kurdistan Regional Government .

Factory owners gathered in Erbil on Sunday, urging the KRG to address the issue. While these businesses hold official permits from the Kurdistan Region, the Iraqi government now requires additional permits and industrial codes issued from Baghdad, causing significant delays and financial losses.

“This is political,” said Saifaddin Ibrahim, owner of a cleaning products factory. “Every day, they find new excuses to stop us. This isn’t the first time—it also happened in September when border crossings were closed for a month.”

Ibrahim called on the KRG to resolve the issue, citing widespread factory shutdowns across Erbil, Sulaimani, Duhok, and Halabja. “We’re told we need permits from Baghdad, but this process takes too long,” he added.

The restrictions have impacted over 2,000 factories, with only 20% of production consumed locally, leaving 80% destined for other Iraqi markets stranded. Factory owners say this has left them with stockpiles of unsold goods and forced many to halt production.

“For six months now, the Iraqi government has been creating obstacles for factories in the Kurdistan Region,” said Mohammed Oula, owner of a mixed nuts factory. “This has caused significant losses because we rely heavily on exporting to the rest of Iraq.”

Oula criticized the decision as politically motivated. “This is a direct hit to our economy. They want to damage the Kurdistan Region’s economy,” he stated.

Sardar Mohammed, who runs a soft drink factory, echoed these concerns. “I have so much inventory, but I can’t move it beyond the Kurdistan Region. The only solution now is to stop production,” he said, noting that Iraqi factories face no similar restrictions and freely export goods to the Kurdistan Region.

The fallout has extended to workers. “I employ 100 workers, and if they don’t work, that’s 100 families without income,” Mohammed added.

Nawzad Ghafour, head of the Sulaimani Chamber of Commerce and Industry, confirmed that factory owners are being told to individually travel to Baghdad to obtain permits and industrial codes, despite already holding valid regional permits.

“The KRG has sent a database of all factories in the Kurdistan Region to Baghdad, confirming their legitimacy,” Ghafour said. “We’ve even suggested forming a joint committee to inspect these factories.”

“But despite promises, Baghdad has taken no action,” he added.

Ghafour added that the KRG is working with Kurdish lawmakers and trade organizations to press Baghdad for a resolution. “We’ve sent official letters to Prime Minister Mohammed Shia’ Al-Sudani and relevant ministries. We hope this dialogue will lead to a solution,” he said.

The Kurdistan Region is home to an estimated 6,000–7,000 factories, many of which are now facing a crisis. Factory owners argue that requiring dual permits within the same country is redundant and detrimental to the economy.

“This isn’t just about businesses—it’s about families and livelihoods,” said Ghafour. “The economic fallout affects everyone in the Kurdistan Region.”