Culturally connected and geographically close neighbours Pakistan and Iran have decided to take advantage of the “discount of distance” and increase trade connectivity between the two while also considering creating an economic bloc in the region on the lines of ASEAN.
On the sidelines of Iranian President Masoud Pezeshkian’s two-day state visit to Pakistan, an agreement was reached during a meeting between Pakistan’s Commerce Minister, Jam Kamal Khan, and Iranian Minister for Industry, Mines and Trade, Mohammad Atabak, to increase bilateral trade to USD 8 billion annually and further deepen economic and political ties.
Pezeshkian had landed in Lahore on Saturday afternoon before flying to the capital, Islamabad, in the evening.
Before departing from Tehran, Pezeshkian had said Iran and Pakistan have always maintained “good, sincere, and deep relations” and plan to increase bilateral trade volume to USD 10 billion annually.
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“[During the meeting], Kamal envisioned that, if fully leveraged, bilateral trade between Pakistan and Iran could easily exceed USD 5–8 billion annually in the coming years,” said Pakistan’s Commerce Ministry in a statement on the high-level discussion between Khan and Atabak that focused on accelerating trade, removing border bottlenecks, and building trust-based partnerships across priority sectors.
While speaking on maximising the potential of neighbourhood trade, Khan also highlighted the benefits of creating an economic bloc like ASEAN countries had done. Such bilateral connectivity could expand to Turkey, Central Asia, Russia, and even parts of West Asia, creating an economic bloc of substantial power and resilience, Khan added.
Meanwhile, Khan suggested organising targeted trade delegations that include representatives from federal and provincial chambers of commerce to enable discussions on market access and regulatory facilitation.
“Pakistan and Iran must utilise this discount of distance. If we don’t, we lose both time and cost benefits. We’ve done this model successfully in Belarus and elsewhere,” he was quoted in the statement as saying.
Both Khan and Atabak agreed on identifying specific sectors that show the greatest potential for mutual benefit, such as agriculture, livestock, services, energy, and cross-border logistics while making use of existing trade corridors and border facilities to follow-up on newly-signed agreements.
“Traders and industrialists in both countries are ready. They trust each other. What they need now is a clear and consistent facilitation mechanism from our side,” Atabak noted.
He also supported the idea of holding a dedicated B2B day during every high-level visit and offered to bring Iranian business groups to Pakistan for in-depth meetings, the statement added.
“With high-level political alignment and mutual trust, Pakistan and Iran appear poised to enter a new phase of strategic economic partnership that could reshape regional trade dynamics,” the statement said.
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