Iran and Pakistan are planning to increase the volume of their annual trade to USD 5 billion over the next five years following the removal of sanctions imposed on Iran on ground of its peaceful nuclear program.
According to a report by Pakistan’s ACQ website, the decision was announced following a meeting at Pakistan’s Commerce Ministry on Monday, which was attended by officials from Federal Board of Revenue, State Bank of Pakistan, and Trade Development Authority of Pakistan.
The meeting was held ahead of the arrival of a high-ranking Iranian delegation in Islamabad to explore existing avenues for cooperation between the two countries. The main mission of the delegation, which will pay a two-day visit to Pakistan, is to revive trade exchanges between the two neighbors.
Following imposition of sanctions on Iran, its trade volume with Pakistan fell drastically as a result of which Pakistan’s exports to Iran plummeted to USD 43 million in 2014 from USD 182 million in 2010.
At the same time, imports from Iran fell from USD 884 million in 2010 to USD 186 million in 2014.
Iran and Pakistan signed a preferential trade agreement (PTA) in 2006, according to which tariff concessions were granted to Iran on 309 tariff lines while Pakistan was offered concessions on 338 tariff lines, the report said.
The Iranian delegation will discuss, among other things, the expansion of PTA with Pakistan as experts predict that normalization of payment mechanisms between the two countries will pave the way for diversification of trade exchanges.
Major export and import goods covered by the PTA include rice, fruits, cotton, cotton yarn, pharmaceuticals and cutlery.
Following the conclusion of Iran’s nuclear talks with the P5+1 group of countries – the US, the UK, France, Germany, Russia and China – in the Austrian capital city of Vienna on July 14, Iran has been trying to revive past economic and trade ties with other countries against a background of the lifting of sanctions imposed on the country.
According to an agreement reached by the two sides, known as the Joint Comprehensive Plan of Action, limits will be put on Iran’s nuclear activities in exchange for the removal of all economic and financial bans against the Islamic Republic.
The agreement has further paved the way for the implementation of a five-year plan that Iran and Pakistan had announced in April 2015 to increase bilateral trade to USD 5 billion.