Iranian Ambassador Mehdi Honardoost has said his country's market has huge potential for Pakistani goods and services. "Pakistan's rivals are much faster and active; therefore, Pakistan has to take steps to grab more portion of the Iranian market which has a lot of potential for Pakistani goods and services," he said speaking at a meeting of Karachi Chamber of Commerce and Industry (KCCI) during his visit to the Chamber.
Iranian Consul General in Karachi Ahmad Mohammadi, KCCI senior vice president Abdul Basit Abdul Razzak, vice president Rehan Hanif, former president Majyd Aziz and the Managing Committee's members attended the meeting. The Iranian Ambassador categorically assured that they are also ready to share almost everything with Pakistani brothers and sisters.
"Iran is keen on developing its ties with Pakistan with focus on hike in trade," he said, adding that trade continues to grow each year. He said Iran is interested in exporting electricity to Pakistan, implementing Iran-Pakistan Gas Pipeline project, signing of Free Trade Agreement and commencement of banking transactions between the two brotherly countries. He said that the business communities of the two neighboring Islamic countries lack information and know-how vis-à-vis the capabilities of the two countries that was main impediment in the way of bilateral trade. However, he said, the situation has been improving as Pakistan-Iran trade volume grew by 31 percent last year.
"Since business communities of both countries are totally unaware of each other's capabilities and opportunities; therefore, we have to focus on exchange of information, trade delegations and other promotional activities between the two countries," he said, calling for improving ties of Karachi Chamber with its peer Chamber in Iran.
Mehdi Honardoost said that both countries have so many commonalities and similarities which simply cannot be found between any other countries of the entire region. He stressed that there is a huge potential of cooperation between the two powers of the region which have good neighbourly ties and have history of friendship and fraternity.
He was of the view that the regional problems such as terrorism, human trafficking and narcotics trafficking should be resolved by the regional countries, which have common perception, common interests and common concerns. He said that Iran was particularly interested in some of the giant projects with Pakistan including the IP Gas Pipeline Project, signing of FTA, and commencement of banking operations between the two countries.
"IP Gas Pipeline project can completely change the face of Pakistan's economy because the cheaper gas being supplied under this project can be used by industries and it can also be used for cheaper power generation," he said, adding that IP gas pipeline project would help create a lot of job opportunities in Pakistan. He said that delays in FTA and commencement of banking transactions are hurdles in the way of enhanced trade and businesses between the two countries.
Referring to high-level meetings between the political leaders of the two neighbouring Islamic States and visits of delegations, the Ambassador said that increase in exchange of delegations indicated that the horizon for enhanced trade ties is bright and clear.
He opined that China-Pakistan Economic Project (CPEC) is a multi-functional project which can bring peace and prosperity in the region as all countries of this region will become part of this project. KCCI president Muffasar Atta Malik informed the Iranian Ambassador that Karachi, which is the economic hub of Pakistan, offers profitable opportunities for investment and joint ventures to investors from Iran. He said that relations between Pakistan and Iran have improved significantly paving way for further enhancement of bilateral trade.
"Iran's decision regarding opening of its commercial bank in Pakistan and the availability of L/C facility with it, are important steps towards enhancing economic relations," he said, adding that the bilateral trade relations between the two countries are healthy and based on trade of several commodities. However, he stressed on need for collective efforts from both sides to improve the existing trade volume between the two countries.
He said that negotiations on FTA between Pakistan and Iran are underway as both countries have expressed their willingness to upgrade Preferential Trade Agreement (PTA) into Free Trade Agreement (FTA) for which initial drafts have already been shared. With Iran agreeing on the initial draft sent by Pakistan, both countries have decided to enhance bilateral trade up to $5 billion through the FTA which currently stands at around.$150 million
Malik noted that in order to facilitate trade with Iran, State Bank of Pakistan (SBP) has also shared draft of Memorandum of Understanding (MoU) for signing its Banking Paying Arrangement (BPA) with Iranian Central Bank. Furthermore, Pak-Iran currency swap agreement is another important option for boost in bilateral trade. In this regard, both countries have already signed MoU through which channels would be opened in the central banks of both countries for trade transactions that would reduce the usage of dollar account for Letter of Credit (LC) clearance.
KCCI president was confident that all these decisions when fully implemented would certainly pave the way for enhanced trade between the two countries. The major bottlenecks in the expansion of Pak-Iran trade are frequent changes in import regime of Iran, high import tariffs applied on exportable items from Pakistan, and indirect trade via Dubai which require attention, he urged.
"As far as potential to enhance Pak-Iran bilateral trade relations are concerned, opportunities are available in Iranian sectors of dairy, livestock, meat and beverages for Pakistani traders and investors," he said, adding that Pakistan can benefit from Iran's petrochemical sector.
He said infrastructural constraints should be sorted out to enhance bilateral trade via Quetta-Taftan land route whereas regular operation of "ECO Container Train" would lend impetus to cargo and transit facilities between the two countries. Furthermore, commencement of special direct flights from Quetta and Gilgit to Mashhad is also a potential avenue for enhancing trade, he said.