Pakistan and Iran strengthen economic ties with new trade agreement

ISLAMABAD: Pakistan and Iran have entered into a memorandum of understanding (MoU) with the objective of boosting their bilateral trade volume to $10 billion. This development comes as Pakistan aims to enhance trade and investment opportunities while working towards economic recovery under a $7 billion programme from the International Monetary Fund (IMF), which was secured in September of the previous year.

During the last fiscal year, trade between the two nations reached $2.8 billion, as reported by Radio Pakistan. The MoU was formalised during a high-level meeting between representatives from the Federation of Pakistan Chambers of Commerce and Industry and the Mashhad Chamber of Commerce and Industry of Iran.

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In this meeting, Iran committed to lowering business visa fees and facilitating trade activities to encourage deeper economic collaboration. This agreement is part of a broader effort by both countries to strengthen their ties, particularly in light of a history marked by tensions, including a military exchange of airstrikes that occurred in January 2024 due to border instability and concerns over militancy.

This MoU builds on a series of diplomatic initiatives aimed at improving relations. Notably, Iran’s former president Ebrahim Raisi visited Pakistan in April 2024, during which both nations signed various MoUs across different sectors, including trade, agriculture, health, and science. Raisi emphasised the significance of increasing trade between the two countries, labelling their current trade volume as “not acceptable.”