Lack of banking channel hindering Pak-Iran trade potential: Iranian envoy

KARACHI: Consul General of Iran Ahmad Mohammadi has said that there is a huge potential to enhance bilateral trade and economic relations between Iran and Pakistan in a variety of subjects but there are also some difficulties hindering smooth trade between the two brotherly countries that need to be addressed, of which the lack of proper banking channel remains at the top.

Speaking at a meeting during his visit to the Karachi Chamber of Commerce & Industry (KCCI), the Iranian Consul General, while acknowledging the official trade volume highlighted by President KCCI, said that all these trade figures were correct but the actual trade volume was much higher as a lot of indirect trade was going on between the two countries because of lack of banking channel.

“We, at the Iranian Consulate, are very serious towards resolving all the issues so that the bilateral trade and economic relations could be strengthened”, he added.

General Secretary Businessmen Group AQ Khalil, President KCCI Agha Shahab Ahmed Khan, Senior Vice President Arshad Islam, Vice President Shahid Ismail and KCCI Managing Committee Members along with Commercial Attaché Mehmood Haji Yousufi Pour and Commercial Counsellor Amir Mehdi Amir Jaffary attended the meeting.

Iranian Consul General further stated that one of the most important action for increasing the existing bilateral trade was business communities’ participation in numerous exhibitions being staged either in Iran or Pakistan.

“Almost two-and-a-half years ago, we staged Iran’s Solo Trade Exhibition here in Karachi which was very successful, bringing the business communities more close to each other. More such exhibitions must take place either in Karachi or in Tehran or any other city of Iran that would surely pave way for much improved trade ties”, he added.

Referring to Prime Minister Imran Khan’s visits to Iran particularly his meeting with the Iranian President, Ahmad Mohammadi stated that both leaders have expressed their intention to further improve trade and economic ties between the two brotherly countries hence, the trade volume was likely to increase in the days to come.

He informed that the Iranian Consulate will be receiving two separate delegations in near future from Iran Chamber of Commerce which will be attending an event in Karachi being organized by Islamic Chamber of Commerce & Industry while another delegation from Tehran Chamber of Commerce will also be here to attend the Build Asia Exhibition.

“We are trying to receive more delegations from Tehran Chamber so that they could hold negotiations with their Pakistani brothers to seek ways and means of how to improve bilateral relations.”

While congratulating the new team at KCCI, Iranian Consul General hoped that during their tenure, KCCI Office Bearers will make efforts to improve trade relations with Iran by sending delegations and participating in numerous exhibitions in Iran. “The Iranian Consulate and KCCI have continuously maintained good relations. I and my colleagues firmly believe that KCCI is our second home in Karachi”, he added.

Earlier, President KCCI Agha Shahab Ahmed Khan, while welcoming the Iranian Consul General, stated that despite being brotherly countries, trade remains low hence, Pakistan and Iran must make collective efforts to explore new avenues. It has always been KCCI’s struggle to promote bilateral trade and the Chamber has a very positive approach towards improving trade ties particularly with neighboring countries.

He pointed out that the bilateral trade between Pakistan and Iran was much less than the potential as Pakistan exports stood at a mere $330.2 million while the imports were around $1.247 billion during 2018.

Agha Shahab noted that the negotiations on Free Trade Agreement (FTA) are underway as both the countries have shared their desire of upgrading Preferential Trade Agreement (PTA) into Free Trade Agreement (FTA) for which initial drafts have already been shared while the State Bank of Pakistan has also shared draft of Memorandum of Understanding (MoU) for signing its Banking Paying Arrangement (BPA) with Iran’s Iranian Bank Markazi Jomhouri. Both countries have already signed MoU through which channels would be opened in the central banks of both the countries for trade transactions that would reduce the usage of dollar account for Letter of Credit (LC) clearance.

He hoped that the desperately needed proper banking channel between Pakistan and Iran becomes a reality soon which would surely boost the existing trade ties.

He was of the opinion that abundant opportunities were available in the Iranian dairy, livestock, meat and beverages sectors for Pakistani traders and investors while Pakistan can also take benefit of Iran’s petrochemical sector.

Agha Shahab underscored the need to sort out infrastructural constraints to enhance bilateral trade via Quetta-Taftan land route whereas regular operation of ECO container train will lend impetus to cargo and transit facilities between the two countries.

While underscoring the need for a realistic approach, President KCCI said that KCCI was keen to strengthen trade ties with their counterparts in Iran.

“We want to strengthen ties and establish strong connection with Tehran Chamber of Commerce & Industry by signing a Memorandum of Understanding with a view to improve cooperation between both Chambers. We would also like to send a trade delegation to explore new avenues for enhancing trade and investment ties between the two brotherly countries”, he added.

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