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Pakistan, Iran to join hands for trade prosperity

Pakistan enjoys good relations with Iran since the partition of sub-continent. Both the states have successful deals regarding the dissimilar socio-economic fields. Relations between Pakistan and Iran have spanned since the common prehistoric Indo-Iranian heritage.

Since 2000, the relations between each state have been normalized and economical and military collaboration has strengthened the relations ever since. Both states aim to grow yearly trade volumes between the 2 states to $5 billion by 2021. In the 5-year strategic action plan inked last year both states also have aimed at boosting their bilateral trade to the level of US Dollars 5 billion by 2021.

Trade between Iran and Pakistan declined to $432 million in 2010-11 from $1.32 billion in 2008-09, after western powers imposed sanctions on Tehran aimed at halting a nuclear program they suspected was aimed at developing a nuclear bomb.

Most of the sanctions were lifted in January 2016 in return for Iran complying with a contract to curb its nuclear ambitions. Iran has the capability to assist the development of the economic infrastructure of Pakistan counting roads, railways dams and others regions. Presently Iran exports almost 100 megawatts (MW) of electricity to the areas of Pakistan that border Iran. Pakistan is in the final stages of negotiating an agreement that would raise that to 1,000 MW. Energy-starved Pakistan suffers almost 12 hours of energy cuts per day and is keen to import Iranian oil, gas, iron and steel. Iran is interested in Pakistani textiles, surgical goods, sports goods and agricultural products.


During 2005, Pakistan and Iran had conducted US$500 million of trade. The land border at Taftan is the conduit for trade in electricity and oil. Iran is extending its railway network towards Taftan. The Iran-Pakistan-India pipeline (IPI Pipeline) is presently under discussion; though India backed out from the project. The Indian government was under pressure by US against the IPI pipeline project, and appears to have heeded American strategy after India and USA proceeded to ink the nuclear deal. In addition, the international sanctions on Iran because of its controversial nuclear program could also become a factor in derailing IPI pipeline project altogether. Trade between the two states has grown by £1.4 billion during 2009. In 2007-08, yearly Pakistan merchandise trade with Iran consisted of $256 million in imports and $218.6 million in export.


On January 12, 2001, both states formed a “Pakistan-Iran Joint Business Council” (PIJB) body on trade disputes. The body works on to encourage the privatization in Pakistan and economic liberalization on both sides of the states. In 2012, the bilateral trade exceeded $3 billion.

Economic adepts of Pakistan for fiscal year 2011-12 reveal imports of $124 million and exports of $131 million, which had collapsed to $36 million of exports to Iran and less than $1 million of imports for the year to April 2015. In 2011, the trade between Iran and Pakistan reached at less than $1 billion and the common geographical borders also religious affinities are among other factors, which give impetus to improved level of trade. It is also revealed that Iran is the second-largest market of Basmati rice of Pakistan, ranking after Iraq.


No doubt, Pakistan and Iran enjoy good political relations, adding that the two neighbors are set to implement projects in different economic sectors, counting energy transmission, banking, customs and cross-border exchanges. Experts expect that with the joint efforts to strengthen the relations and accelerate projects’ implementation, the two states witness a boom in bilateral trade relations which benefit the two and the region as well. It is said that an uncertain law and order situation in addition to smuggling are the main hurdles in the way of trade between the two countries.

Pakistan’s exports
Imports from Iran
92.32 Rice (46.28)
283.49 Oil (164.16)
(-) 191.17
146.98 Rice (69.17)
242.08 Oil (87.55)
(-) 95.1
154.63 Rice (96.9)
450.27 Oil (145.18)
(-) 254.73
167.38 Rice (92.71)
405.19 Oil (139.89)
(-) 237.81
(-) 330.21
(-) 295.2

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