Pakistan, Iran vow to meet potential $10bn trade target in coming years

ISLAMABAD: Pakistan and Iran have emphasised the need to sign Free Trade Agreement (FTA), at the earliest to improve border facilities, and enhance business engagement.

Both have pledged to meet the potential $10 billion trade target in coming years. Pakistan signed Preferential Trade Agreement (PTA) with Islamic Republic of Iran on March 4, 2004 and has expressed the desire to sign FTA. Both bordering nations have agreed to further intensify negotiations on FTA.

The Centre for Afghanistan, Middle East & Africa (CAMEA) at the Institute of Strategic Studies Islamabad (ISSI), in collaboration with the Iranian Embassy in Islamabad organised a seminar titled, “Pakistan- Iran Ties: Prospects for Trade and Connectivity.”

Ambassador of Iran to Pakistan, Reza Amiri-Moghaddam emphasised trade and connectivity as the key to economic growth, stressing the need for investment in transit corridors. Noting Pakistan and Iran’s strategic location as trade bridges between Asia and Europe, he called for removing bureaucratic barriers, enhancing transport infrastructure, and deepening cooperation. He also updated on a range of bilateral initiatives including opening of border crossings, establishment of border sustenance markets, new targets for bilateral trade, and feasible options for connectivity between Iran and Pakistan. He informed that Pakistan was fourth biggest trade partner of Iran till 2023 but now Afghanistan has taken the place. Now Pakistan is placed at fifth position, Reza Amiri added.

Pakistan’s Ambassador in Tehran, Mudassir Ali Tipu highlighted the growing trade potential between Pakistan and Iran, particularly in agriculture and infrastructure development. He emphasised the need to sign an FTA, improve border facilities, and enhance business engagement.

Ambassador Sohail Mahmood, Director General ISSI, noted significant progress since 2021, including border market operationalisation, energy cooperation through the Polan-Gabd transmission line, and the expansion of barter trade, alongside commitments made during President Raisi’s 2024 visit, such as the $10 billion trade target, expediting FTA negotiations, and economic free zones.

He also stressed the importance of leveraging regional platforms like Economic Cooperation Organisation (ECO), Developing-8 (D-8), Shanghai Cooperation Organization (SCO), and the Belt and Road Initiative (BRI) to enhance trade and infrastructure development, particularly through Gwadar-Chabahar port collaboration. While acknowledging challenges, including sanctions, informal trade, and logistical constraints, he called for enhancing border infrastructure, formalizing trade networks, and exploring alternative financial mechanisms. Reaffirming Pakistan’s shift to a geo-economic approach, he emphasised that sustained dialogue and targeted policy initiatives can transform challenges into opportunities, fostering a more integrated, prosperous, and stable region.

Amina Khan highlighted the $10 billion trade target and key energy projects as significant steps in strengthening ties.

Copyright Business Recorder, 2025