Banking link needed to improve Pak-Iran trade

Updated 15 Dec 2019

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Iranian trade delegation calls upon establishing legal channels to encourage legal channels and discourage smuggling. — APP/File
Iranian trade delegation calls upon establishing legal channels to encourage legal channels and discourage smuggling. — APP/File

KARACHI: An Iranian trade delegation, led by former attaché Morad Nemati, while visiting the Karachi Chamber of Commerce and Industry (KCCI) on Saturday, said that it was essential to remove trade barriers and reduce custom duties to improve trade relations between the two neighbours.

They also called upon establishing legal channels to encourage legal trade and discourage smuggling.

Nemati added that in addition to bringing down the high custom duties, formal banking channel between the two countries must be activated as demanded by the business community of the two countries since quite some time now.

While referring to China-Pakistan Economic Corridor, Nemati said the project will open opportunities not just for Pakistan but also for Iran and if Tehran chooses to become part of this project, it would surely ensure prosperity in the entire region.

He also underscored the importance for the business communities from the two countries to meet more frequently and improve contacts, besides holding single country exhibitions which would improve bilateral trade and investment.

Nemati assured full support and cooperation to the business community to improve trade and explore new avenues in trade cooperation.

Earlier, KCCI Vice President Shahid Ismail said that despite being brotherly countries, trade volume between Iran and Pakistan remains abysmally low. He advised the two sides to make collective efforts and explore new avenues.

He pointed out that the bilateral trade between Pakistan and Iran was much less than the potential as Pakistan’s exports to Iran stood at a mere $330.2 million while the imports were around $1.247bn during 2018.

Ismail noted that the negotiations for Free Trade Agreement (FTA) are underway as both countries have shared their desire to upgrade Preferential Trade Agreement into an FTA for which initial drafts have already been shared while the State Bank of Pakistan (SBP) has also shared its draft for a Memorandum of Understanding (MoU) for signing its Banking Paying Arrangement with Iran’s Iranian Bank Markazi Jomhouri.

Both countries have already signed MoU to open central banking channels for trade transactions and reduce the usage of dollar account for Letter of Credit clearance.

Published in Dawn, December 15th, 2019