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Pakistan, Iran eye $5bn trade

Updated Aug 25, 2015 09:51am


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ISLAMABAD: Ahead of a high-level technical delegation from Iran, the Ministry of Commerce on Monday explored various avenues to enhance bilateral trade to $5 billion in the next five years after lifting of international sanctions against Iran.

A delegation from Iran will visit Islamabad on August 25-26 to revive the trade links. Pakistan has a narrow export basket to Iran because 63 per cent of exports comprised of rice alone.

Pakistan’s exports to Iran fell to a low level of $43 million in 2014 from $182m in 2010. While Iranian imports fell to $186m in 2014 from $884m in 2010.

Pakistan signed a preferential trade agreement (PTA) with Iran in 2006. Iran is not willing to convert PTA into a free trade agreement.

Tariff concessions were granted to Iran on 309 tariff lines while Pakistan was offered concessions on 338 tariff lines. Major sectors covered under the PTA were rice, fruits, cotton, cotton yarn, pharmaceutical products and cutlery.

In April 2015, Pakistan and Iran decided to prepare a five-year plan to enhance bilateral trade to the tune of $5bn. The visiting delegation will also discuss expansion of PTA. Experts predict that payment mechanism normalisation will pave way for diversification of exports to Iran.

The meeting held on Monday in the commerce ministry was attended by officials from Federal Board of Revenue, State Bank of Pakistan and Trade Development Authority of Pakistan. The meeting discussed the trade complementarity with Iran and decided to actively pursue policies to enhance exports of agricultural products to Iran.

Published in Dawn, August 25th, 2015

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Comments (21) Closed

Zak Aug 25, 2015 09:56am

5 b $ is nothing Pakistan and Iran bilateral trade can achieve several trillions in few years.

Sachin Tandon Aug 25, 2015 10:04am

@Zak By Exporting rice and cotton, your figure can never be achieved. Pakistan has very few items that Iran needed. This time Iran needs Technology, which Pakistan don't have.

Sandhu Aug 25, 2015 10:14am

Waooo fantastic. We can increase this too as Pak have lots of potential.

Naqeeb Aug 25, 2015 10:25am

@Sachin Tandon , something is better than nothing. No worries Iran should contact India for technology.

El Cid Aug 25, 2015 10:26am

Pakistan and Iran must have open borders. Open trade. And a defense, economic and trade pack. And get Turkey into it too.

NY Aug 25, 2015 10:40am

I think even India and Pakistan should trade. Politics and business should be kept separate and business internet might help in resolving tension

brr Aug 25, 2015 10:42am

@Zak I guess you do not know what a trillion dollar is - it is 4 times Pakistan's GDP (246.88 billion US dollars ). So how in the world will trade between pakistan and its neighbour become "trillions" is a few years. You must be smoking something powerful.

Nisar Aug 25, 2015 10:47am

@Sachin Tandon Disagree, Pakistan has raw material for anything imaginable, just needs help to get it ready and presentable. The technology sector in Pak is at its infancy, do you think the Indian technology just landed in there, it took time, there is no shortage of tech firms in Pak but not well known yet. Its a good step and lets see what happens in 5 years.

Sunil Varma Aug 25, 2015 11:12am

@Nisar ..We wish well for Pakistan trade with Iran. Good luck with advancement in Technology. That will be the day, when Iran, Afghanistan , Pakistan , China and India who have been trade partners on the Silk route since ancient centuries can again revive that Golden age in Asia. Imagine what prosperity and peace it can bring to the region if the free flow of people and trade is again revived.

Sadiq Ali Bohra Aug 25, 2015 11:36am

too little, too late...... why it always takes minimum 5 yrs...?

Fact Aug 25, 2015 11:54am

186mn$ to 5bn$ Projection in 5 years is just a dream, Pakistan needs Iran as strategic partner in the region, not that Iran cant survive without Pakistani Rice, fruits and Poultry.

zebswati Aug 25, 2015 12:14pm

Dream is the beginning !! , Just imagine so many possibilities , e.g 150 JF-17 fighter planes potential exist means $5 billion alone ! when sanctions lifted ( as already Iran is negotiating with Russia and China for fighter planes !, And in turn in Energy Iran could invest in and provide Gas/oil /infrastructure . Just imagine the positive 1000s of potential exists. Rice /cotton is just an appetizer !

Akhtar Aug 25, 2015 12:22pm

The positive news is that at least people are planning and talking of increased trade. The groundwork and infrastructure needs to be established to make this come true. Pakistan has great potential and resource and it is achievable. I hope PM Nawaz takes advantage of the situation.

Nilesh Aug 25, 2015 12:22pm

Great start...keep it up.

XYZ-Indian Aug 25, 2015 01:09pm

@Naqeeb :- Open the transit route for India to Iran, similarly open the route to Afganistan , if I would have been in Pak leadership team I would have recommended. Pak will earn lot, think over it

Nisar Aug 25, 2015 01:22pm

@Sunil Varma Lets hope so, there may be rivalry between Pak and India, but at the same time, the bigger picture looks very rosy as well (I dont belive in the negative comments posted). With Pak progressing economically as compared to a few years ago, I can see India joining the CPEC and becoming a client of Pak.

Ikram Yousefzai Aug 25, 2015 02:39pm

It's nothing to do with trade or supply and demand. It's directly proportional to the two ruling families and their personal ties with these two countries Iran and Saudi Arabia. When Zardari (Bhutto) family in ruling the trade with Iran will increase as it was in 2010 & decrease with SA and when Sharif's family in ruling the trade with SA with will increase and decrease with Iran. This is our so called democracy (which roaming around in circle of two families).

Shahid Usa Aug 25, 2015 03:26pm

@Zak I wish you are right but our neighbors will not let this happen This is the closest country distance vise we can trust buy sell by roads even by walking

Imran Soomro Aug 25, 2015 04:16pm

Regional economic integration is very important for regional economic prosperity. Iran is an important regional player and its primacy to the global players would skyrocket in the coming decade. Iran enjoys considerable influence on Syria, Iraq, Lebanon and Yemen. These are the countries which have been left in the lurch by the GCC countries led by Saudi Arabia. Iran will play a considerable role in shaping the future policies of these states which will not go well with the royal families. America and the EU direly needs Tehran in the fight against IS and the latter's sanguine role in the Syrian war.

CASUALGUY Aug 26, 2015 12:37am

@Zak If there is real will. This trade can be in trillion of USD by year end! Once the sanctions are lifted.

CASUALGUY Aug 26, 2015 04:50am

@brr I got better stuff! It's gonna happen!