Pakistan, Iran fast-track border SEZ
Pakistan and Iran have agreed to accelerate implementation of the Rimdan-Gabd border Special Economic Zone (SEZ) and deepen economic cooperation as both countries renewed efforts to raise bilateral trade to $10 billion, following a peace deal between Iran and the United States (US).
The US is expected to remove sanctions against Tehran, which will open a large market in Iran for Pakistan. During the conflict, Pakistan gave Iran access to ports including Gwadar by opening six land routes – a new route Pakistan found during the war. Earlier, Pakistani traders had used the Afghan route to reach Central Asian states and Russia, but Afghanistan closed this route due to tensions with Pakistan.
According to officials, Iran had been conducting informal trade worth $45 billion through Dubai port. But during the war, the UAE sided by Israel, making Pakistan the best option for Iran to shift that trade, which would become legal after the US removes sanctions.
Federal Minister for Investment Qaiser Ahmed Sheikh held a comprehensive meeting with Iranian Ambassador Reza Amiri Moghadam to strengthen bilateral economic cooperation and address issues related to trade, investment and regional connectivity.
Discussions focused on enhancing economic relations under the MoU signed between Pakistan's Board of Investment and Iran's Supreme Council of Free Trade, Industrial and Special Economic Zones for the establishment of joint free or special economic zones along their shared border.
Both sides reaffirmed their commitment to achieving the bilateral trade target of $10 billion. It was noted that the SEZ initiative, particularly around the Rimdan-Gabd border region, along with previously agreed border markets, would play a pivotal role in improving livelihoods and boosting cross-border commerce.
Detailed discussions were held on operationalisation of the SEZ. The Iranian side emphasised the need for a joint visit to finalise and notify the boundaries. While Iran has completed demarcation on its side, Pakistan's side requires coordination. It was agreed that a joint technical visit would be undertaken, followed by the development of terms of reference. Sheikh highlighted the strategic importance of the location, noting its proximity to key maritime routes and major ports, making it a viable hub for trade and investment. He observed that the area offers comparatively better security conditions than other border points.
The meeting also addressed Iranian containers stuck at Karachi Port for approximately 100 days. Ambassador Moghadam requested Pakistan's support for their early release, particularly consignments including essential goods such as medicines. Sheikh assured that the Board of Investment would coordinate with relevant ministries to resolve the matter on priority.
Both sides expressed concern over the decline in cross-border trade volume. It was noted that prior to recent tensions, approximately 700-800 trucks crossed the border daily, which has now decreased significantly. The two sides discussed enhancing this number, with a potential target of up to 2,000 trucks per day.
Ambassador Moghadam highlighted Iran's readiness to provide Pakistan enhanced access to Central Asian markets, presenting significant opportunities for regional connectivity. Both sides agreed to actively promote joint ventures and encourage private sector collaboration. Sheikh emphasised that current developments present a timely opportunity to expand trade through both land and sea routes. He acknowledged that while the SEZ initiative has been agreed at the highest level, implementation challenges remain, particularly in coordination with provincial governments and external geopolitical factors.
He stated that the Special Investment Facilitation Council (SIFC) would be engaged to coordinate with provincial authorities to address these challenges, reaffirming that the Board of Investment would take a proactive lead in advancing this initiative. It was agreed that the Iranian side would formally share a comprehensive communication outlining key concerns, enabling the Board of Investment to convene an inter-ministerial meeting for coordinated action. Ambassador Moghadam extended an invitation to Sheikh to visit Iran, which was accepted.
Meanwhile, calling for a new era of economic integration between Pakistan and Iran, Commercial Attaché of Iran Murad Nemati emphasised that the two countries must capitalise on their geographical advantages and forge stronger joint ventures.
Addressing a meeting at the Karachi Chamber of Commerce and Industry (KCCI) during a visit by a trade delegation from Khorasan Razavi Province, Nemati expressed gratitude to Pakistan for standing with Iran during difficult times. "In challenging times, true friends are recognised, and Iran will never forget the solidarity extended by Pakistan," he remarked.
Nemati stressed that Pakistan and Iran possess unique strategic advantages that can position them as gateways connecting South Asia, West Asia and East Asia. Enhanced connectivity would unlock new trade and investment opportunities while contributing to regional peace and prosperity.
Referring to challenges including border issues, logistics constraints and customs procedures, Nemati called for greater collaboration to convert shared opportunities into sustainable gains. He emphasised strengthening connectivity between Karachi, Gwadar, Bandar Abbas and Chabahar, and improving border infrastructure.
Underscoring the need for deeper industrial cooperation, Nemati said joint ventures should be prioritised. Pakistan's GSP Plus market access, improved infrastructure on the Iranian side and growing Chinese investment create immense opportunities for mutually beneficial partnerships. He urged closer cooperation among chambers of commerce and intensified exchange of trade delegations.
KCCI Acting President Muhammad Raza termed the visit a reflection of deep-rooted friendship and shared cultural ties. He said the time had come to shift Pakistan-Iran relations from a buyer-seller framework to one based on industrial partnerships, joint ventures and long-term investment. Greater collaboration in mining, manufacturing, IT and SME development could generate substantial benefits, he added.
Raza reaffirmed KCCI's commitment to fostering stronger economic relations and assured the delegation of full support for dispatching a KCCI delegation to Iran to explore new avenues for trade and investment.