The much awaited banking transactions between Pakistan and Iran are expected to start in the first half of April 2017. The central banks of both the neighbouring countries have agreed to issue Letters of Credit (LoCs), the payment mechanism for bilateral trade. This was stated by president Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Zubair F Tufail at a press conference here at Federation House on Tuesday.
"Representative of Iranian Central Bank was to visit Pakistan last Monday, but, due to his engagements in the Nauroz festival he could not make his way to Pakistan. However, he is now expected to come before March, 31 to sign the agreement with the State Bank of Pakistan (SBP)," he said.
The formal trade between the both Islamic counties would reopen in April shortly after the issuance of LCs, he said. The overall trade between the two counties saw a drastic decline of some 80 percent in the last 5 years mainly due to crippling international economic sanctions on Iran.
Zubair hopped the volume of 2-way trade, which currently stands at the lowest $261 million, would go up to $1.5 billion within a year. Iran has a huge market for Pakistani rice, food and pharmaceutical sector products. Chief Executive (CE) Trade Development Authority of Pakistan (TDAP) S M Munir, Chairman Rice Exporters' Association of Pakistan (REAP) Mahmood Molvi, and others were also present on this occasion.
Mahmood Molvi on this occasion said, "We are at the final stage of exporting our rice to Iran as some 95 percent trade and banking related issues have been resolved." "We are all set to dispatch our initial basmati rice consignments to Iran. We have already signed agreements for the exports of some 10,000 tons of rice to the neighbouring country," he said and added that the Iranian government has also agreed to import some 30,000 tons of Rice from Pakistan. He said that the country can export some 100,000 tons of rice to Iran in the next 3 quarters, capturing its 30 to 40 percent rice market with fast penetration.
He deplored that Pakistan is fast loosing the Saudi Arabian rice market saying some years back 80 percent of Saudi's rice market was captured by Pakistan, but now only mere 20 percent. While the rest of 80 percent has now been captured by India, he said.
Later, Mahmood Molvi announced to join United Business Group UBG of FPCCI, a group led by S M Munir. CE TDAP said the opening of banking transactions would boost bilateral trade and bring the two Islamic counties even closer to each others. Recalling his most recent visit to Iran, he said more than 80 percent people are pro-Pakistani and they want to see close relations with Pakistan.
Responding to query he said that declining trend in the country's exports mainly due to global recession. The developed counties like China and India also witnessed double digit decline in their exports. One of the major issues agitating the industrialist and exporters is delay of refund, of which they are facing difficulties in carrying out their running business expenditures, he said.
He said TDAP as an export promotion body was making its all out efforts to enhance trade and facilitate traders. He said some 10 to 12 exhibitions are being held in different counties in a month. He recalled that TDAP held lifestyle Pakistan exhibition 'Aalishan Pakistan' in India during Sep 11-14, 2014 in New Delhi. The exhibition was a true showcase of the progressive Pakistan with first-ever collective presence of top Pakistani brands anywhere in the world. However due to non co-operative attitude of Indian Authorities, this year, we are not being able to decide whether to hold the mega exhibition or not.