How did Russian and British influence affect Tehran’s economy during the 19th century?

During the 19th century, the Russian Empire and British Empire exerted significant influence over Tehran’s economy by securing preferential treatment for their merchants and products, effectively dominating the internal market.1

This influence integrated Iran into the global capitalist system as a peripheral partner. The economic shift had several key consequences:1

• Trade Reorientation: Iran became a source of raw materials—such as opium, rice, tobacco, and nuts—while importing manufactured goods from Western countries. This transition led to a sharp decline in the export of domestic manufactured commodities.12
• Market Vulnerability: The focus on nonfood export crops made the economy increasingly susceptible to global market fluctuations and periodic famine.2
• Concessions and Debt: To raise revenue, Qajar leaders granted foreign companies exclusive concessions over natural resources and commodities in exchange for cash payments. These funds were often squandered by the court rather than invested in development.2
• Structural Disruption: The sale of state-owned lands to private merchants disrupted traditional land tenure and production, contributing to broader economic decline, poverty, and social stratification.12