There is a huge potential of bilateral trade between Pakistan and Iran as both the countries not only share common history, religion and geography, but also economy and business interests. Iran has endured years of sanctions from the United States and European nations, but now it is ready to join the international community and is opening up a host of trade and investment opportunities for foreign investors. During the years of isolation, illegal trade between the two countries multiplied, but Pakistan had failed to grab the Iranian consumer market through legal channels. However, it is still not too late and Pakistani business community has the opportunity to enter the Iranian market before India takes advantage of the situation. Iran has developed textile industry, whereas Pakistan has made good progress in auto industry and both the countries can benefit from each other’s experience. Pakistan should prefer Iran over the distant countries in export of agricultural products.
The much-hyped Pakistan-Iran gas pipeline project is still in doldrums and there is no word from the government on the issue. The government has recently signed LNG import agreement with Qatar and it should also now give some considerations to start work on the gas pipeline as billions of dollars have already been invested in the project. Pakistan’s exports are dwindling and the industry is confronting severe energy crisis. It is hoped that both the issues will be resolved if gas pipeline project is completed and Pakistan ensures its presence in the Iranian auto market. The Iranian gas will give a new lease of life to the ailing industry of Pakistan while the project will also ensure flow of cash from Pakistan to Iran. The project was unveiled in Islamabad in 2008 and China was also ready to join it. Iran is also ready to supply 4,000 megawatt electricity and plans to build an oil refinery in Gwadar. A close trade and business cooperation is in the interest of both the countries, but there is a need to move forward with sincerity. There is also need to develop close liaison between central banks of both the countries.
In the meantime, Pakistan will have to maintain cautious approach toward Iran in view of the geopolitical situation in the region as India will never allow Pakistan and Iran to maintain close business cooperation. India is trying to emulate Chinese investment in Gwadar and is persuading Iran to get hold of Chaharbagh port. However, a healthy economic competition is in the best interest of everyone, but Pakistan should have to safeguard its stakes.
