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Pakistan and Iran agree to enhance trade volume to $5 billion
Pakistani PM Nawaz Sharif addressing the Pakistan-Iran Joint Business Forum in Islamabad on March 26, 2016.

Pakistan and Iran agree to enhance trade volume to $5 billion

Pakistan and Iran have plan to take annual trade to $5 billion under the five-year Strategic Trade Cooperation Plan

ISLAMABAD – Pakistan and Iran have set an ambitious target of taking annual trade to $5 billion in next five years. The current volume of bilateral trade is mere $250 million.

Board of Investment (BOI) Chairman Miftah Ismail said that construction of Iran-Pakistan gas pipeline is top priority of the government. He said Pakistan and Iran was enjoying good political and economic relations. He added that Iranian President’s visit to Pakistan indicates importance of the bilateral relations.

“Currently, the IP gas is slightly expensive than the price of Liquefied Natural Gas (LNG) that Pakistan is importing from Qatar,” said Ismail.

The BOI Head informed the Iranian businessmen that Pakistan was blessed with natural and skilled human resources with second largest middle class which was also offering investment and trade opportunities for foreign investors.

He said the Foreign Direct Investment in the country was safe by the act of Parliament and providing special incentives and tax exemptions on the import of plant machinery and raw material.

The two countries will establish a mechanism to cope with issues hampering bilateral trade such as non-tariff barriers, absence of a mutual recognition agreement, lack of banking facilities, infrastructure bottlenecks and trade through informal channels.

The Iranian investors showed interest in the areas of paper industry, power, cement and steel sectors. However, they complained against high duties and taxes that the BOI chairman promised to look into.

“Iran has the capability to help the development of the economic infrastructure of Pakistan including roads, railways, dams and others area,” Rouhani said.

Keeping aside the issue of US sanctions, the Iran-Pakistan gas pipeline will not become operational for at least three more years, as Islamabad seeks to renegotiate the price in addition to facing problems in arranging funds for laying infrastructure.

The Trade Development Authority of Pakistan and the Iranian Trade Promotion Organisation will jointly draw up a comprehensive programme of promotional activities including single-country exhibitions, sharing of commercial intelligence and exchange of business delegations.

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