Abstract
This paper examines the virtual water footprint in international trade with major trading partners of the Iranian economy using an input–output approach. Utilizing 2016 data, the study quantifies water consumption across different sectors of Iran’s economy and evaluates the impact of trade on water resource management. The results indicate that Iran is a net importer of virtual water due to severe water constraints—meaning that the amount of water required to produce imported goods exceeds that used for exported goods. The agricultural sector accounts for approximately 90% of total national water consumption. This study underscores the significance of Iran’s trade relationships with countries such as China, the United Arab Emirates (UAE), and Iraq in shaping virtual water imports and exports. It further recommends that policymakers design strategies to enhance water productivity and promote sustainable management of international trade in light of Iran’s limited water resources.
Aim and Introduction:
Water scarcity and food security constitute pressing global challenges requiring comprehensive research and policy attention. Assessing the efficiency of water use and the virtual water footprint within Iran’s international trade framework is essential for improving water resource management and ensuring national food security.
Virtual water trade refers to the transfer of embedded water—i.e., the water used in the production of goods and food—between nations. This concept reflects the comparative water costs and resource endowments of different economies. It enables water-scarce countries such as Iran to import water-intensive products from regions with more efficient water management, thereby conserving domestic water resources and optimizing consumption patterns.
Accordingly, this study investigates Iran’s virtual water footprint in the context of international trade, focusing on its principal trading partners and examining how trade structure influences national water sustainability.
Methodology:
To quantify virtual water and the national water footprint, this study first calculates direct and indirect water withdrawals for major economic sectors by dividing each sector’s total water consumption by its output. The total water footprint for each product is determined as the sum of domestic and foreign components, representing the total virtual water embedded in national consumption.
The net import of virtual water is calculated by subtracting virtual water exports from virtual water imports. The Gross Virtual Water Imports (GVWI) is defined as the sum of commodity imports (CI) multiplied by the Commodity Virtual Water Content (CVWC) of each product.
The equations for estimating Total Global Virtual Water Imports (TGVWI) and Total Global Virtual Water Exports (TGVWE) are expressed as follows:
















where n represents the number of countries and c represents the number of products.
The Total Net Global Virtual Water Trade (TNVWT) is calculated as:
TNVWT=TGVWI−TGVWE
The water trade balance is thus the difference between the volume of virtual water imported and that exported by a country or region.
Findings:
The agricultural sector exhibits the highest import value (318196 billion rials) but comparatively lower virtual water imports. The industrial production and services sectors show smaller final and intermediate virtual water imports relative to their total import values. Although the oil and mining sector records the highest export value, its final virtual water exports remain low compared with its total exports. The construction sector displays the smallest final virtual water exports among sectors with positive net exports.
In 2021, Iran’s total water footprint amounted to 523668 million cubic meters (MCM), with agriculture as the dominant contributor and the oil/mining sector as the smallest. The foreign water footprint accounted for 50028 MCM of the total. Agriculture, oil, mining, and services exhibited the lowest water consumption multipliers. Sectors with negative net exports—namely agriculture, industrial production, and services—showed positive water trade balances, while others exhibited negative balances. Agriculture recorded the highest positive water trade balance (1563 MCM), whereas transportation had the lowest (–-157 MCM).
Overall2021, Iran was a net importer of virtual water, with a total water trade balance of approximately 1658 MCM. In 2021, Iran’s imports from major trading partners totaled USD 38574 million (78% of total imports), and exports amounted to USD 38572 million (57% of total exports). The United Arab Emirates (UAE) was the largest import partner (30%), followed by China and Turkey. China accounted for 27% of exports, and Iraq for 11%.
Iraq, Turkey, India, and China maintained positive net exports to Iran, with Iraq and China leading, while the UAE had the lowest. Iran imported 11980 MCM of virtual water overall, of which 9449 MCM came from major trading partners. Virtual water exports totaled 12027 MCM, with 6941 MCM directed to those partners. Iran recorded positive virtual water net exports to China, India, Turkey, and Iraq, but negative ones with Germany, the Netherlands, Russia, and the UAE. Overall, Iran’s virtual water trade was nearly balanced, with a slight net export of 60 MCM.
In the agricultural sector, the largest final virtual water imports originated from Russia and Germany. For oil and mining, China and Turkey were the main sources. The industrial production sector imported most heavily from China and the UAE, while China and Turkey led in electricity, water, and gas supply. The UAE dominated imports in services, transportation, and residential construction. Except for Iraq, the industrial production sector accounted for the highest virtual water imports across all partner countries.
Conversely, Iran’s agricultural sector exported the most virtual water to China and Iraq. The oil and mining sector’s primary virtual water exports were directed to China, while the industrial and mining sectors also exported substantially to China and Iraq. The oil and mining sectors were the dominant virtual water exporters to most countries except Iraq and Russia, where the industrial sector prevailed. The UAE mainly received exports from mining, industrial production, and agriculture. Overall, Iran showed positive net exports in agriculture, oil, and construction, but negative net exports in other sectors.
Discussion and Conclusion:
In 2021, Iran was a net virtual water importer, with imports (11980 MCM) far exceeding exports (12027 MCM), underscoring its dependence on imported water through traded goods. Agriculture exhibited the highest direct water consumption and virtual water content, while services, oil, and mining showed the lowest. Despite its intensive water use, agriculture had the smallest final and intermediate virtual water imports, whereas industrial production and services accounted for larger virtual water shares due to higher import volumes.
The agricultural sector contributed the largest domestic and national water footprint. Transportation and construction demonstrated the highest (least efficient) water consumption multipliers, while agriculture remained the most efficient. Although indirect water use in services and industry was lower than in agriculture, it still exerted a notable cumulative impact on national water consumption.
2021Among major trading partners, the UAE contributed over 3673 MCM of virtual water imports, making it Iran’s top source. Russia supplied the most agricultural virtual water, India and Germany dominated mining and oil, and China led in industrial production. Iraq and Japan were significant contributors to the services sector.
These findings highlight Iran’s dependence on virtual water imports—particularly agricultural products—to meet its domestic water needs. However, agricultural productivity remains low, and water management is inefficient. Overemphasis on agricultural self-sufficiency could exacerbate water scarcity. Policymakers should therefore revise trade policies concerning water-intensive products, favoring imports of high-virtual-water commodities while promoting exports of low-virtual-water goods. Such strategies would alleviate domestic water stress and enhance overall water security.