Federal Minister for Commerce Engr. Khurram Dastgir Khan has directed the representatives of banks to furnish viable proposals for the facilitation of banking transactions for trade with Iran within a month. The Minister was chairing a meeting with State Bank of Pakistan (SBP) and private banks for exploring the banking channels available for trade with a post-sanctioned Iran. The Minister said that Pakistan is exploring ways and means to initiate trade with Iran in a big way despite several impediments persisting after the lifting of sanctions.
The meeting was informed that despite alleviation of international sanctions from Iran, private banks are reluctant to establish direct banking channels with Iran. The absence of banking links because of the refusal of international banks to support transactions with Iran proved to be the prime reason for Pakistan's trade with Iran not getting the much-expected boost.
The representatives of Pakistani private banks visited Iran a few months ago and report great enthusiasm in Iran regarding trade with Pakistan. SBP and Central Bank of Iran signed a Letter of Intent on the occasion of visit of Iranian President to Pakistan for enhancing mutual cooperation and establishing direct banking links. Pakistani traders sense great opportunities of exports right next door with minimal transportation cost especially of Basmati rice which used to fetch millions of dollars from the pre-sanctioned Iran. Pak-Iran trade which was over one billion dollars now stands at US $270 million because of international sanctions.
Ministry of Commerce is extensively engaged with the Ministry of Trade and Industry and Ministry of Agriculture of Iran to operationalize the Preferential Trade Agreement and enhance trade facilitation at the border. Dastgir recently paid a visit to Pak-Iran border at Taftan and inspected the facilities available for smooth movement of vehicles trading across the border and promised to upgrade the infrastructure. As per the 5-year Economic Engagement Plan agreed between Pakistan and Iran, the Ministry of Commerce of Pakistan has forwarded the draft FTA framework to Iran this month. The response of Iran is awaited.
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