Pakistan, Iran sign agreement to boost trade to $10 billion

Pakistan and Iran have signed a memorandum of understanding (MoU) with the goal of boosting their bilateral trade to $10 billion, as reported by Pakistani state media on Tuesday.

This agreement comes as Pakistan works to expand trade and investment while navigating its economic recovery under a $7 billion International Monetary Fund (IMF) program, which was secured in September.

In the last fiscal year, which ended in June, bilateral trade between Pakistan and Iran reached $2.8 billion, according to Radio Pakistan.

The MoU was formalized during a high-level meeting between the Federation of Pakistan Chambers of Commerce and Industry and Iran's Mashhad Chamber of Commerce and Industry. During the talks, Iran also pledged to reduce business visa fees and support trade activities.

While the two countries have historically faced challenges along their shared, porous border, including mutual accusations of failing to combat militancy, they have taken steps to improve relations. Tensions escalated in January last year when both nations exchanged airstrikes, each claiming to target militant hideouts on the other’s side of the border.

In April 2024, Iran’s late president Ebrahim Raisi visited Pakistan, marking a step toward mending relations after the military clashes. During his three-day visit, the two nations signed several MoUs and agreements across various sectors, including trade, science and technology, agriculture, health, culture, and the judiciary. Raisi emphasized that the current trade volume between the two nations was “unacceptable” and called for efforts to increase it to $10 billion.