PM Shehbaz plans to boost Pakistan Iran Trade to $10B via FTA and stronger regional ties

Pakistan and Iran are entering a new phase of economic partnership as Prime Minister Shehbaz Sharif announced a bold plan to increase bilateral trade from the current $3 billion to $10 billion in the coming years. This ambitious target will be pursued through the signing of a Free Trade Agreement (FTA), reduction of trade barriers, and stronger regional ties, especially between bordering provinces.

Key Developments and Agreements

• Memorandum of Understanding Signed:
  Pakistan and Iran recently signed an MoU to formalize their commitment to boosting trade to $10 billion. The agreement was reached during high-level meetings between the Federation of Pakistan Chambers of Commerce and Industry and Iran’s Mashhad Chamber of Commerce and Industry.
• FTA Negotiations:
  Both countries are actively discussing a Free Trade Agreement, which is expected to remove tariffs, simplify customs procedures, and encourage investment across sectors such as agriculture, health, technology, and energy.
• Border Region Focus:
  PM Shehbaz Sharif highlighted the 900-kilometer shared border between Pakistan’s Balochistan and Iran’s Sistan-Baluchestan as a vital corridor for trade and regional stability. Enhanced economic ties in these areas are seen as a way to combat terrorism and promote development.
  

Benefits of Expanding Pakistan-Iran Trade

• Economic Growth:
  • Increased exports and imports will boost GDP and create jobs in both countries.
  • Enhanced business opportunities for Pakistani and Iranian entrepreneurs.
• Regional Stability:
  • Stronger economic links can help ease border tensions and improve security cooperation.
  • Joint development projects in border provinces promote prosperity and reduce poverty.
• Diplomatic Gains:
  • Improved trade relations strengthen diplomatic ties and open doors for further collaboration in science, technology, and culture.
• Ease of Doing Business:
  • Iran has pledged to reduce business visa fees and facilitate trade activities, making cross-border commerce more accessible.

Recent Context and Diplomatic Engagement

• High-Level Visits:
  PM Shehbaz Sharif’s recent visit to Tehran follows a series of diplomatic engagements, including the late Iranian President Ebrahim Raisi’s trip to Pakistan in April 2024, where multiple agreements were signed to deepen cooperation across various sectors.
• Regional Peace Initiatives:
  The Prime Minister has emphasized the importance of regional peace, supporting Iran’s mediation efforts and advocating for diplomatic solutions to regional disputes, including those involving Kashmir and Palestine.

Challenges and Opportunities

• Security Concerns:
  Both countries have faced border security issues and occasional tensions, but recent agreements signal a commitment to overcoming these challenges for mutual benefit.
• Economic Recovery:
  The trade push comes as Pakistan works to stabilize its economy under an IMF program, making increased trade and investment with neighbors even more critical.

Frequently Asked Questions (FAQs)

Q: What is the current trade volume between Pakistan and Iran?
A: The current trade volume is around $3 billion, with plans to increase it to $10 billion in the next few year.

Q: What steps are being taken to achieve this goal?
A: Both countries are negotiating a Free Trade Agreement, reducing visa fees, and focusing on joint development in border regions.

Q: How will this impact the region?
A: The initiative is expected to boost economic growth, create jobs, and promote regional stability and cooperation

Pakistan and Iran’s renewed commitment to economic partnership marks a significant step towards regional integration, economic prosperity, and lasting peace. With strong political will and practical agreements, the $10 billion trade target is now within reach