Pakistan and Iran plan to expand bilateral trade from its current level of just over $3 billion to an ambitious $10 billion.
The 22nd Joint Economic Commission (JEC) between Iran and Pakistan, held in Tehran earlier this week, signaled a notable recalibration of economic strategy between the two neighbors.
The meeting highlighted the substantial economic potential that remains largely untapped despite decades of diplomatic and trade relations.
With a shared vision to expand bilateral trade from its current level of just over $3 billion to an ambitious $10 billion, the two nations are now poised to deepen strategic cooperation across multiple sectors, laying the groundwork for enhanced regional integration.
Both Iran and Pakistan recognize that their current trade volumes do not reflect the true capacity of their economic relationship. This gap points not to a lack of opportunity but rather to underutilized channels of cooperation.
The commission underscored the crucial role of specialized committees, chambers of commerce, and joint commissions in revitalizing trade.
Market facilitation at the border, expanding cross-border trade hubs, and establishing joint industrial parks were emphasized as practical steps to remove logistical hurdles and stimulate private sector engagement on both sides.
The significance of the three shared land border crossings between Iran and Pakistan cannot be overstated. These gateways serve as vital arteries for the exchange of goods, services, and people, yet their full potential remains unrealized.
The enhancement of border markets, along with streamlined customs and trade regulations, could unlock new levels of commerce and investment.
A central theme of the meeting was the emphasis on transportation infrastructure as a key driver for bilateral and regional trade.
Both countries are well aware that the development of road, rail, and maritime networks could transform Iran into a strategic gateway to South Asia and the broader Middle East.
The trilateral agreement earlier this month involving Iran, Pakistan, and Turkey, under the auspices of the Economic Cooperation Organization (ECO), to revive monthly freight services on the Istanbul–Tehran–Islamabad rail corridor illustrates this ambition.
This 6,540-kilometer route, once fully operational, promises to significantly reduce transit times and enhance regional trade competitiveness.
The maritime domain also holds considerable promise. Plans to expand port cooperation and establish direct shipping lines between Pakistani ports and Iran’s strategically positioned port of Chabahar offer new avenues for facilitating trade and investment.
These initiatives not only support the movement of goods but also open pathways for tourism and cultural exchange, sectors that present untapped opportunities for private sector growth.
Iran and Pakistan’s shared strategic interests extend beyond commerce into the broader objective of fostering peace, prosperity, and security within the Islamic world. The alignment of their regional goals underpins a commitment to deepen cooperation that transcends immediate economic gains.
By translating the outcomes of these high-level meetings into concrete policy actions, the two countries aim to achieve new milestones in bilateral relations. The ambitious $10 billion trade target signals a strategic recalibration of their economic priorities.
Last year’s trade volume of $3.1 billion—where Iran’s exports to Pakistan stood at $2.4 billion and imports from Pakistan at $700 million—demonstrates a trade imbalance but also points to areas for mutual growth.
Iran’s export portfolio to Pakistan, largely dominated by petrochemicals, refined petroleum products, and pharmaceuticals, benefits from Pakistan’s growing demand in these sectors. Conversely, Pakistan’s exports to Iran, though smaller, are poised for expansion with increasing market access.
Both nations possess distinctive comparative advantages across diverse sectors. Iran’s strong presence in petrochemicals, refining, pharmaceuticals, mining, ceramics, and engineering services offers vast opportunities for Pakistani markets.
Meanwhile, Pakistan’s large domestic market of over 250 million people, more than double Iran’s population, provides an attractive destination for Iranian products and investments.
Pakistani industries, bolstered by a youthful workforce, also present potential for joint ventures and knowledge transfer, especially in agriculture, textiles, and manufacturing.
The financial dimension of bilateral trade has garnered particular attention amid ongoing sanctions and economic uncertainties. Strengthening banking ties, promoting barter trade mechanisms, and enabling trade settlements in national currencies are seen as vital measures to circumvent external restrictions.
The establishment of commercial bank branches in border trade zones and special economic zones would facilitate smoother transactions and increase trust between businesses on both sides.
Historically, Iran and Pakistan have maintained stable diplomatic relations despite regional challenges. Even during periods of heightened regional tensions and proxy conflicts, their bilateral relationship has remained resilient.
This political stability offers a solid foundation for expanding economic cooperation.
Given Pakistan’s strategic partnership with China and Iran’s growing economic ties with Beijing, the trilateral dynamic offers a unique opportunity to harness China’s vast investment capacity and developmental expertise.
China’s pledge to invest $60 billion in Pakistan, of which a fifth has already been realized in the Gwadar port, coupled with Iran’s integration into the Belt and Road Initiative (BRI), positions Pakistan as a crucial transit point connecting China to West Asia and beyond.
The combined population of China, Iran, and Pakistan—totaling over 1.7 billion people—represents an enormous market and a corridor of connectivity to Central Asia, Europe, and Africa.
This geo-economic reality underscores the importance of strategic collaboration between Tehran and Islamabad, reinforced by their historical ties and shared aspirations.
Iran has maintained a balanced stance in its relations with both Pakistan and India, navigating complex regional dynamics with diplomacy. Pakistan’s vocal support for Iran in international forums, including the United Nations Security Council, during times of war with the Islamic Republic, has solidified trust.
These geopolitical considerations reinforce Pakistan’s role as a natural partner for Iran in pursuing economic and security cooperation.
Beyond macroeconomic factors, Iran and Pakistan share deep-rooted cultural and historical connections. Their border populations have coexisted peacefully for generations, fostering a unique social fabric that can facilitate cross-border trade and tourism.
By capitalizing on this human dimension, both countries can promote people-to-people exchanges, expand markets for handicrafts and cultural industries, and build resilience against external geopolitical pressures.
With continued political will and effective implementation, Iran and Pakistan can transform their economic relationship from potential into reality, thereby contributing to stability and prosperity across South and West Asia.
Reference Link:- https://www.presstv.ir/Detail/2025/09/21/755439/Iran-Pakistan-economic-realignment-alongside-China%E2%80%99s-rise