Pakistan, Iran should devise payment mechanism

Pakistan, Iran should devise payment mechanism

KARACHI: The two central banks of Pakistan and Iran should devise a mechanism for swift payment in order to enhance bilateral trade between the two countries.

Mian Nasser Hyatt Maggo, President of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said on Tuesday while welcoming Hassan Nourian, Consul General of Islamic Republic of Iran in Karachi and Mahdi Amir Jafari, Third Consul for Economic Affairs, at the Federation House, Karachi.

Primarily, the two central banks need to devise a mechanism for smooth and swift payment systems for the bilateral trade as the starting point in the right direction; as that will give confidence to traders on both sides, the FPCCI president added.

The FPCCI is very keen to enhance bilateral trade between the two countries and for that matter removal of the bottlenecks is warranted; namely, lack of banking and financial channels; absence of barter-trade agreements or mechanisms at governmental level and unfair geopolitical pressures.

He explained that the central/state banks of the two countries and apex chambers of commerce and industry need to come closer; and, we can immediately start the consultative processes immediately at various levels through webinars. He also offered FPCCI’s assistance and its platform for making efficient and tangible linkages.

Maggo also requested Export Guarantee Fund of Iran (EGFI) to extend their funding guarantees to more traders with enhanced limits and play a role of a catalyst.

He added that he is worried on the COVID situation in the brotherly country of Iran and hoped that Iranian people will soon overcome the menace on the back of their ever-persistent resilience and high hygiene standards.

On the occasion, Hassan Nourian said that the formal trade between the two countries stands only at $1 billion and it is too low; given the fact that the combine population of Pakistan and Iran is 300 million.

He added that there might be informal trade along the lines; but, the two countries must work in tandem to progressively increase the bilateral trade on a sustainable basis.

Hassan Nourian emphasized that the quality of Iranian products is world-class and Iranian industry buys their plants mostly from best manufacturers.

He also appreciated the willingness of Pakistani Embassy in Iran for supporting enhancement of bilateral trade.

Hassan Nourian pointed out that there is still a huge untapped potential for Pakistani fruits in Iran; particularly, various varieties of mango. He also emphasized that petrochemical industry is very advanced in Iran technologically and can greatly help Pakistan with their foreign exchange strains.

Hanif Lakhany, Vice President, FPCCI, pointed out that tariffs are playing out as a major hindrance; as the tariffs are very high on both the sides; and, that results in rendering bilateral trade uncompetitive.

Nasir Khan, vice president FPCCI, said that during a recent meeting with State Bank Governor, FPCCI raised the issue of lack of banking channels with Iran and the SBP has asked to discuss the matter further in the light of currently in place bilateral mechanisms between Iran and other countries, like China, India, Turkey, etc.

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