Karachi, December 08, 2017 (PPI-OT):The Ambassador of Islamic Republic of Iran Mehdi Honardoost has said that lack of information and know-how about the capabilities of Iran and Pakistan amongst the business communities of the two neighbouring Islamic countries was hindering trade but the situation has been improving as Pakistan-Iran trade volume improved by 31 percent last year.
“Business communities of both countries are totally unaware of each other’s capabilities and opportunities therefore, we have to focus on exchanging information, trade delegations and other promotional activities between the two countries, besides improving ties of Karachi Chamber with its peer Chamber in Iran”, he added while speaking at a meeting during his visit to the Karachi Chamber of Commerce and Industry.
Iranian Consul General in Karachi Ahmad Mohammadi, President KCCI Muffasar Atta Malik, Senior Vice President Abdul Basit Abdul Razzak, Vice President Rehan Hanif, Former President Majyd Aziz and KCCI Managing Committee members attended the meeting. Iranian Ambassador said that both countries have so many commonalities and similarities which simply cannot be found between any other countries of the entire region.
He stated that there was a huge potential of cooperation between the two powers of the region with good neighbourly ties and whole history of friendship and fraternity. He was of the view that the regional problems like terrorism, human trafficking and narcotics trafficking should be solved by the regional countries, which have common perception, common interests and common concerns.
Mehdi Honardoost said that Iran was keen to develop its ties with Pakistan by focusing on enhancing trade which continues to grow each year, exporting electricity to Pakistan, implementing Iran-Pakistan Gas Pipeline, signing of Free Trade Agreement and commencement of banking transactions between the two brotherly countries. “Your rivals are much faster and active than you so you also have to take steps accordingly. You have to grab some more portion of the Iranian Market which has a lot of potential for Pakistani goods and services. We are also ready to share almost everything with our Pakistani brothers and sisters”, he added.
He said that Iran was particularly interested in some of the giant projects with Pakistan including the IP Gas Pipeline Project, Signing of FTA, and Commencement of Banking Operations between the two countries. “IP Gas Pipeline project can completely change the face of Pakistan’s economy as the cheaper gas being supplied under this project can be used as raw material by industries which would create a lot of job opportunities whereas it can also be used for cheaper power generation”, he said, adding that delays in FTA and commencement of banking transactions are impediments to enhanced trade and businesses between the two countries.
Referring to high-level meetings between the political leaders of the two neighbouring Islamic States and visits of delegations, the Ambassador said that increase in exchange of delegations indicate that the horizon for enhanced trade ties is ‘bright and clear’. Honardoost opined that China-Pakistan Economic Project (CPEC) was a multi-functional project which can bring peace and prosperity in the region as all countries of this region will become part of this project.
Speaking on the occasion, President KCCI Muffasar Atta Malik informed the Iranian Ambassador that Karachi, which is the economic hub of Pakistan, offers profitable opportunities and added facilities for investment and joint ventures to investors from Iran. He was of the view that relations between Pakistan and Iran have improved significantly giving way to further enhancement of bilateral trade.
He said that Iran’s decision regarding opening its commercial bank in Pakistan and the availability of L/C facility with it, are important steps towards enhancing economic relations. “The bilateral trade relations between Pakistan and Iran are healthy and based on trade of several commodities. However, collective efforts are needed from both sides to improve the existing trade volume between the two countries”, he added.
He said that negotiations on FTA between Pakistan and Iran are underway as both countries have expressed their willingness to upgrade Preferential Trade Agreement (PTA) into Free Trade Agreement (FTA) for which initial drafts have already been shared. With Iran agreeing on the initial draft sent by Pakistan, both countries have decided to enhance bilateral trade upto $5 billion through the FTA which currently stands at around $150 million.
Muffasar Malik noted that in order to facilitate trade with Iran, Pakistan’s State Bank of Pakistan (SBP) has also shared draft of Memorandum of Understanding (MoU) for signing its Banking Paying Arrangement (BPA) with Iranian Bank Markazi Jomhouri. Furthermore, Pak-Iran currency swap agreement is another important option for enhancing bilateral trade. In this regard, both countries have already signed MoU through which channels would be opened in the central banks of both countries for trade transactions that would reduce the usage of dollar account for Letter of Credit (LC) clearance.
He was confident that all these decisions when fully implemented would certainly pave the way for enhanced trade between the two countries. The major bottlenecks in the expansion of Pak Iran trade are frequent changes in import regime of Iran, high import tariffs applied on exportable items from Pakistan, and indirect trade via Dubai which require attention, he opined.
As far as potential to enhance Pak-Iran bilateral trade relations are concerned, he said that opportunities are available in Iranian sectors of dairy, livestock, meat and beverages for Pakistani traders and investors. Pakistan can also take benefit of Iran’s petrochemical sector. Infrastructural constraints should be sorted out to enhance bilateral trade via Quetta-Taftan land route whereas regular operation of “ECO container train” would lend impetus to cargo and transit facilities between the two countries. Furthermore, commencement of special direct flights from Quetta and Gilgit to Mashhad is also a potential avenue for enhancing trade, he added.
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