The current volume of trade between Pakistan and Iran, which had once crossed $1 billion mark, has come down to $270 million due to unclear government policies, unavoidable regional irritants and international sanctions on Tehran due to its alleged nuclear programme. Iran is Pakistan’s immediate neighbour with robust industry and vibrant economy despite sanctions. Iran is also one of the leading oil and gas exporting countries, but Pakistan and Iran could not take benefits of trade and investment to the minimal level. The mega projects launched between the two countries ended in fiasco and Pakistan Iran Gas Pipeline is one of them the fate of which is unclear despite billions of dollars stakes. The two countries always remained steadfast allies and reliable partners in testing times but failed to devise prudent policies to enhance trade volume. Unfortunately, the vacuum is filled by smugglers and criminal elements who are minting billions of dollars through illegal trade.
As international sanctions on Iran are phasing out, the chances of trade expansion and enhancement of commercial ties are bright but still little efforts are being made to establish business to business contacts on official and private levels and explore opportunities for mutual benefits of the two nations. India has recently signed a contract with Iran to upgrade Chabahar Port and is investing heavily on infrastructure projects to get access to Afghanistan. The Pakistani government also needs to develop and upgrade road and rail links with Iran on fast track basis and efforts should also be made to remove trade barriers through legal channels. The State Bank of Pakistan had allowed the country’s banks to establish links with their Iranian counterparts, but little progress has been made to devise a mechanism to resume banking transactions between the two countries. The lack of infrastructure, a viable mechanism and delay in change of customs laws are the main hurdle so far in enhancementof trade.
Pakistan has vast potentials of investment and Iranian businessmen and traders should be invited to set up industries in the country. Iran should also be invited to take benefit of China Pakistan Economic Corridor which can change the chemistry of this region. Pakistan can also benefit from Iran in enhancing its trade with Turkey and beyond and this region can become hub of international business, trade and investment. There is a need to plug illegal trade between Pakistan and Iran through legal channels. Pakistan must sign a free trade agreement with Iran to curb smuggling and improve bilateral trade. There also need to revive gas pipeline project which is indispensable to run the wheel of industry in the country.
