Pakistan prepares for Rouhani’s visit as illicit trade continues

Published: March 17, 2016



Ahead of Iranian President Hassan Rouhani’s visit to Pakistan – scheduled at the end of the month – Minister for Commerce Khurram Dastgir Khan has directed officials to draft a comprehensive strategy to enhance trade cooperation with the country.

With Iran free of most economic sanctions, potential to strengthen business ties with the neighbouring country has increased substantially with many state and private representatives looking to take advantage of the situation.

Special report: The future of Pakistan-Iran relations

Khan instructed the ministry while presiding over a meeting to prepare proposals for Rouhani’s visit.

The meeting was attended by officials of Ministry of National Food Security and Research, State Bank of Pakistan (SBP), Federal Board of Revenue, representatives of traders, rice and kinnow associations. Two officials of the Iranian Ministry of Trade visiting Pakistan also attended the meeting on the special request of the minister.

The meeting was informed by the collector customs Quetta that there has been a three-fold increase in revenue at Pakistan-Iran border as a result of better border management which has discouraged illicit trade.

The representative of the SBP informed the meeting that there is no restriction on trading through formal banking channels with Iranian companies in Euro.

Need for alarm

Khan’s decision to call for a trade proposal may just be a step in the right direction since a recent research report by the Pakistan Business Council (PBC) has revealed huge discrepancies in the bilateral trade data available.

Treading with caution in trade with Iran

“The discrepancies in trade data of Iran and Pakistan shows that smuggling is rampant between the two countries and there is huge under-reporting by Pakistan customs,” Invest and Finance Securities CEO Muzammil Aslam commented on the report.

For instance, Iran’s reported exports to Pakistan in 2014 were $837 million while Pakistan’s reported imports from Iran were $185 million, just 22% of Iran’s figures.

Similarly, Iran’s reported imports from Pakistan in 2014 were $261 million while Pakistan reported exports to Iran were just $43 million, a mere 16.5% of Iran’s figures, according to the data gathered by PBC.

“Our government’s machinery is not doing its job properly because our customs is not recording all trade activities at the borders. We should consider Iranian data more authentic because trade figures show that they are recording most of the trade via road routes,” Aslam said.

Although Iran and Pakistan have some trade links through sea routes, most of the trade between the two countries is done through road channels.

Since Pakistan and Iran do not have banking channels, SBP cannot provide any reliable data. In this case, the only remaining source of data is Pakistan Customs, he said.

According to the report, discrepancy can also be seen at the tariff levels as nearly all of Iran’s reported top 20 exported products do not fall under Pakistan’s reported top 20 imports from Iran.

Fate unclear: Though most sanctions gone, oil trade still uncertain

Additionally inconsistency is also noticed in Pakistan’s reported exports to Iran and Iran’s reported imports from Pakistan, the report noted.

The report warns that Pakistan-Iran trade is continuously shrinking for the last five years; while on the other hand, China continues to be Iran’s top trading partner with Iran’s exports to China being $9.2 billion and Iran’s imports from China at $12.5 billion in 2014.

Published in The Express Tribune, March 17th, 2016.

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Reader Comments (8)

  • roadkashehzada
    Mar 17, 2016 - 12:31PM

    rouhani should be received the way nawaz sharif was received in tehran. we should have self respect and should treat countries on reciprocal basisRecommend

  • Jameel ur Rasheed
    Mar 17, 2016 - 12:49PM

    The visit shall be followed by a visit of Saudi royals. Mark my words.Recommend

  • karl
    Mar 17, 2016 - 2:41PM

    either that or our PM will be summoned to KSA for debriefingRecommend

  • Abbas
    Mar 17, 2016 - 4:04PM

    My Dear you are right but at the time of visited of both Sharifs follow the line of KSA, even the ambassador of iran to pakistan is also in pakistan at the time of visit.Recommend

  • Xnain
    Mar 17, 2016 - 5:05PM

    Trade, Trade and Trade but nothing more! Recommend

  • Tariq Shah
    Mar 17, 2016 - 6:14PM

    How was Nawaz received? we must treat all leaders with respect, because we are a nation that honors guests, i don’t know how Nawaz was received, but we should never give up our lofty ideals and morals and we don’t change when others do.Recommend

  • Mar 17, 2016 - 10:45PM

    Iran and Pakistan can benefit a lot….Pakistan should buy solar energy electricity generators from IranRecommend

  • Xnain
    Mar 18, 2016 - 1:46PM

    @Tariq Shah:
    Before being an Iran-apologist and gracing us with this confused jumble of English, you should have read upon mistreatment of Pakistani delegation in Tehran. Recommend

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