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Iran, Pakistan Sign MoUs to Boost Trade, Economic Ties

By Nigar Bayramli January 18, 2023

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Pakistani Prime Minister Shehbaz Sharif met with Iranian President Ebrahim Raisi on the sidelines of the annual meeting of the Council of Heads of State of the Shanghai Cooperation Organisation in Uzbekistan, on September 15, 2022. / Tasnim News Agency

Pakistan and Iran have signed 39 memorandums of understanding (MoU) after a two-day border trade committee meeting aiming to enhance business relations.

According to the Pakistani Dawn, the Iranian and Pakistani officials agreed to remove hurdles, increase bilateral legal trade and implement the barter agreement for achieving the target of bilateral trade. Among others, the two sides agreed to open an additional border crossing point.

“We are ready to open more border markets with Pakistan,” said Iran’s Sistan-Baluchestan’s Deputy Governor Dawood Shaharki, who led his country’s delegation.

For his turn, the President of the Chamber of Commerce and Industry of Quetta, Abdullah Achakzai, called for more concerted efforts to increase the quantum of bilateral trade through legal routes, and said that “we want free bilateral trade between the countries based on equality.”

In addition, the two countries vowed steps to increase bilateral trade to $5 billion annually. 

In late December, Consul General of Iran in Karachi Hassan Nourian said the trade volume between Iran and Pakistan was not satisfactory, standing at around $1.5 billion per annum, and that both governments were targeting $5 billion.

Meanwhile, Iran had recently removed banned commodities from the list of items to be imported from Pakistan under the Iran-Pakistan preferential trade agreement.

Tehran and Islamabad had also taken several steps to strengthen energy cooperation in recent months amid Pakistan experiencing a gas and petroleum products shortage. Boosting energy ties was a key topic of discussion between Pakistan Prime Minister Shehbaz Sharif and Iran President Ebrahim Raisi during their meeting on the sidelines of the Shanghai Cooperation Summit (SCO) in Samarkand in September 2022. In October 2022, the Iranian ambassador to Pakistan, Mohammad Ali Hosseini, said Tehran was ready to provide petrol, electricity and natural gas to Islamabad at cheap rates to help cope with the worsening situation. 

Later in October, a high-level Iranian business delegation visited Pakistan and the two sides agreed to form a joint committee to expedite the implementation of a Free Trade Agreement (FTA). On January 17, the head of a trade delegation from the Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIMA), Morad Nemati, said that Pakistan and Iran should soon finalize the FTA.

He further urged the chamber to push the government to expedite the Iran-Pakistan FTA and give it a final shape so that the trade between the two countries could substantially be improved as per the potential. In addition to removing trade barriers, the two sides should further promote barter trade to boost the existing trade ties, Nemati believes.