TEHRAN – Since the current administration took office in August 2021, the Iranian government has strongly promoted and pursued economic diplomacy, especially with neighboring countries and countries in the region. Also, as a long-standing trading partner of the Islamic Republic, Pakistan has become one of the major focal points of expanding trade ties.
Iran and Pakistan have great potential for economic cooperation, given the complementary nature of their economies, their shared cultural heritage, and good political relations between the two countries, but the level of exchange between the two countries is daunting. It was not satisfactory until now. The past few years.
Iran and Pakistan signed a Preferential Trade Agreement (PTA) in August 2006, which entered into force in September of the same year. It was expected to create a new environment for However, almost 17 years after the aforementioned deal, the two countries’ annual trade is still below $2 billion.
Lack of proper banking relationships and conflicting customs regulations are said to be the main obstacles to trade between the two countries.
Achieving annual trade target of $5 billion
Despite the above problems and obstacles, Iran and Pakistan have $5 billion in annual trade on their agenda for next year, and to realize the aforementioned goal, the governments of the two Islamic republics have taken various measures. I am teaching.
In November 2021, Tehran and Islamabad agreed to use barter deals to facilitate bilateral trade in the face of US sanctions.
In October this year, the Iran Chamber of Commerce and Industry (ICCIMA) and the Pakistan Federation of Chambers of Commerce and Industry (FPCCI) signed three memorandums of understanding (MOUs) aimed at expanding trade between the private sector. of both countries.
Also on Saturday, Iran’s Trade Promotion Organization (TPO) announced that the importation of all goods listed in the Iran-Pakistan PTA has been permitted by the government.
Therefore, Iranian importers are allowed to register applications to import from Pakistan all products that were previously on IRICA’s import ban list.
Along with other measures, this latest measure is expected to severely impact Iran-Pakistan trade and significantly increase the value of trade between the two countries.
According to the Islamic Republic of Iran Customs Administration (IRICA), Iran and Pakistan will export 2.1 million dollars worth of US$1.267 billion in the first seven months of the current Iranian calendar year (21 March to 22 October). We traded more than tons of commodities. Iran’s exports to Pakistan reached 1.6 million tons worth $704 million in the seven months mentioned, while imports from Pakistan reached 512,000 tons worth $563 million.
Petroleum and gas products such as liquefied petroleum gas, gas liquids, bitumen, liquefied natural gas, and liquefied butane are the major commodities exported by Iran to Pakistan, while agricultural products and foodstuffs are a major part of Pakistan’s export basket to Iran. configure the item.
With IRICA’s lifting of the ban on imports of goods listed in the Iran-Pakistan PTA, Iranian traders will have more choice in the goods they import from Pakistan, and hope that other barriers will be removed with the move. I’m here. trade.
Iran and Pakistan have already established barter mechanisms, and the PTA and other agreements signed between the private sectors of the two countries are on track to achieve their set trade goals.
An issue to consider going forward is that the lifting of the import ban should not lead to trade imbalances between the two countries, and that the Iranian government will continue to seek new ways to increase exports to Iran.
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