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Iran and Pakistan Set to Finalize Free Trade Agreement during President’s Visit

Ambassador of Iran to Pakistan, Dr. Reza Amiri Moghadam, has stated that there is a strong possibility that the bilateral Free Trade Agreement (FTA) between Iran and Pakistan will be finalized during the upcoming visit of Iranian President Ebrahim Raisi to Pakistan. This agreement is expected to significantly increase mutual trade between the two countries.

During Dr. Moghadam’s visit to the Islamabad Chamber of Commerce and Industry (ICCI), he mentioned that several bilateral economic and trade agreements will be signed during the visit. These agreements aim to further strengthen the economic and trade relations between Iran and Pakistan and promote business between the two countries.

Currently, the bilateral trade volume between Pakistan and Iran stands at $2.5 billion, showing an 11% increase over the past 11 months. With the implementation of the FTA and other bilateral agreements, there is a strong possibility of doubling the mutual trade volume to reach $5 billion in the coming years.

Ambassador Moghadam highlighted the importance of the Pakistan-Iran gas pipeline, which will benefit both the domestic and industrial sectors of Pakistan. He expressed Iran’s commitment to resolving Pakistan’s energy problems and emphasized that Iran completed the pipeline project to the border of Pakistan in 2009, costing $1 billion. However, the project is still awaiting completion from the Pakistani side.

In terms of trade partnerships, Iran already has established energy and gas trade with Turkey, Turkmenistan, and Azerbaijan. Ambassador Moghadam suggested that Pakistan can adopt similar procedures to enhance trade relations with Iran.

Addressing the banking channel issue between the two countries, Ambassador Moghadam mentioned that Iran has a banking channel with Turkey, Bahrain, and Iraq, and Pakistan can follow the same procedure to facilitate trade.

Furthermore, the Ambassador stressed the need for strong air, maritime, and sea links between Pakistan and Iran. He suggested declaring Gwadar and Chabahar as sister ports to enhance connectivity and economic relations. These ports will not only connect Pakistan and Iran to regional and global trade but also play a significant role in the Pakistan-China Trade Corridor and Belt and Road Initiative projects.

Ambassador Moghadam emphasized that Pakistan and Iran can connect to regional and global trade through these ports, making their mark in the global trade market. This connectivity will allow both countries to fulfill 70% of each other’s needs through mutual trade.

To facilitate business interactions, Iran has introduced electronic visas for Pakistani businessmen, making the visa process easier. The Ambassador encouraged further improvement in relations between the business communities of Pakistan and Iran.

President of the ICCI, Ahsan Zafar Bakhatwri, also addressed the forum and highlighted the current trade volume between Pakistan and Iran, which exceeds $2.5 billion annually. He mentioned that both countries aim to increase the annual trade volume to $5 billion as part of a five-year trade cooperation plan.

President Bakhatwri acknowledged the importance of infrastructure improvements to facilitate increased barter trade. He also emphasized the need to resolve the issue of high tariffs from the Iranian side and establish credible payment mechanisms.

In conclusion, Iran and Pakistan are poised to strengthen their economic and trade relations through the finalization of the FTA and various bilateral agreements. These developments have the potential to significantly boost mutual trade and enhance regional and global connectivity.

Source: Islamabad Post