'Legal trade with neighbours a must'

Industrialists and business leaders have called on the government to prioritise official trade and curb illegal trade with neighbouring countries, stressing the need to enhance trade relations with Iran, India, and Afghanistan. This, they argue, will generate more revenue and positively impact Pakistan's economy.

At a meeting hosted by the Karachi Chamber of Commerce and Industry (KCCI), business executives urged the government to take practical steps to improve border trade, enhance facilities at checkpoints, and organise a robust barter system to promote legal trade. They highlighted the importance of boosting imports and exports with these countries in local currencies, which would reduce trade costs and positively affect Pakistan's foreign exchange reserves.

Reza Babak Afghahi, Chief Executive of Iran's Ta'min Petroleum & Petrochemical Investment Company (TAPPICO), stressed the importance of promoting official trade between Pakistan and Iran while reducing unofficial trade to zero. He pointed out that a large volume of Iranian products enters Pakistan through unofficial channels, causing losses to both countries. Afghahi pointed out that strong connections between the business communities of Pakistan and Iran could significantly improve the official trade volume, benefiting both economies.

During his visit to the KCCI, Afghahi mentioned that last year, Pakistan imported various petroleum and petrochemical products worth $5 million from multiple countries, which could be locally produced through joint ventures with Iranian companies. "Despite sanctions, Iran exported $200 million worth of goods to the United States, demonstrating that sanctions are not an insurmountable obstacle to trade," he said. He encouraged Pakistani businesses not to worry about sanctions, suggesting that practical solutions can be found to facilitate trade.

Afghahi also highlighted Iran's readiness to share raw materials, knowledge, and expertise with Pakistan, which would lead to increased employment and business opportunities. He suggested that instead of exporting finished goods, Iran could supply raw materials to Pakistan, allowing local industries to add value and use the products for domestic consumption or exports.

KCCI President Iftikhar Ahmed Sheikh noted that despite strong bilateral relations, the trade volume between Pakistan and Iran remains below its full potential. He stressed that trade between the two countries could reach $10 billion if barriers were reduced, customs procedures streamlined, and efforts were made to support small and medium-sized enterprises (SMEs). Sheikh urged both governments to improve the ease of doing business to foster deeper economic integration.

Muhammad Farooq Shaikhani, President of the Hyderabad Chamber of Small Traders and Small Industry (HCSTSI), underscored Pakistan's immense trade opportunities with Iran, India, and Afghanistan. He noted that importing gas and electricity from Iran could meet Pakistan's energy needs, while exporting agricultural products such as rice, wheat, and fruits could strengthen bilateral trade. Similarly, Shaikhani highlighted the benefits of trade with India, particularly in the industrial and agricultural sectors. He suggested that Pakistan could export cement, cotton, and agricultural products to India while importing machinery, pharmaceuticals, and technology in return.

Regarding trade with Afghanistan, Shaikhani identified significant opportunities for Pakistan to export pharmaceuticals, textiles, and food items, while importing dry fruits and minerals from Afghanistan.