Iranian Ambassador to Pakistan Syed Muhammad Ali Hussaini has said that Pakistan and Iran have a huge potential to boost bilateral trade.

During a meeting with PIAF Chairman Mian Nauman Kabir, the ambassador had a detailed discussion on trade and economic relations between the two countries. He said that Iran and Pakistan should concentrate on trade and economic activities to boost bilateral relations. He said the two countries should adopt a new approach and move forward on a faster pace.

Though trade between the two countries is growing gradually, it is less than the potential, he said, adding that business organisations of the two countries should be given a wake-up call so that they can play their due role to strengthen trade and economic ties between the two Muslim neighbours.

The Iranian envoy said that despite all odds bilateral trade between the two countries is good. He expressed the hope that mutual trade and economic relations between the two countries would be stronger in future. He said that Pakistan and Iran have common borders and cultural bonds. “Iran has always tried to strengthen relations with neighbouring countries and Pakistan has always been the first priority. The Iranian embassy would extend its full support to trade delegations,” he said.

Despite being brotherly countries, the PIAF chairman said, bilateral trade between the two countries remains low. “Hence, Pakistan and Iran must make collective efforts to explore new avenues. It has always been our desire to promote bilateral trade and the PIAF has a very positive approach towards improving trade ties, particularly with neighbouring countries,” he said.

Kabir pointed out that bilateral trade between Pakistan and Iran was much less than the potential, as Pakistani exports stood at a mere $330.2 million and imports at $1.247 billion in 2018. He said that Pakistan could increase its exports to $5 billion within a very short period. He noted that negotiations on a Free Trade Agreement (FTA) were under way, as both countries have shared their desire to upgrade the Preferential Trade Agreement (PTA) into the FTA. He said that initial drafts have been shared and the State Bank of Pakistan has shared a draft of the Memorandum of Understanding (MoU) with the Central Bank of Iran to sign the Banking Paying Arrangement (BPA).

Both countries have already signed the MoU through which channels would be opened in central banks of both countries for trade transactions that would reduce the use of dollar account for the Letter of Credit (LC) clearance. He expressed the hope that the desperately-needed banking channel between Pakistan and Iran would become a reality soon and boost the existing trade ties.

He was of the opinion that abundant opportunities were available in the Iranian dairy, livestock, meat and beverages sectors for Pakistani traders and investors. Pakistanis can also benefit from Iran’s petrochemical sector, he said.

The PIAF chief underscored the need to sort out the infrastructural problems to enhance bilateral trade via the Quetta-Taftan land route whereas regular operation of ECO container trains will give impetus to cargo and transit facilities between the two countries. He said that Pakistan and Iran have large domestic markets and unique geostrategic competitive advantage. In order to make use of each other’s strong areas, both countries would have to make joint efforts, he said. He said the latest trade figures did not reflect the actual potential between the two countries. He said that there were some bottlenecks in the way of increasing trade and they needed to be addressed on priority. “By curbing smuggling and undocumented trade, we can improve bilateral trade,” he said.