KARACHI: Abbas Ali Abdollahi, the outgoing consul general of Iran, has said that Pakistan and Iran should establish banking channel for the promotion of bilateral trade, according to a statement on Thursday.
“Pakistan’s banking channels were established with various countries worldwide, thus, with Iran it should not be neglected,” he said at the farewell reception hosted for him by the Karachi Chamber of Commerce and Industry (KCCI).
Several meetings were held with the previous four governors of the State Bank of Pakistan (SBP) for the establishment of banking channel between the two countries, he said.
“Bank Milli of Iran can open its branches in Pakistan and the National Bank of Pakistan can open its branches in Iran,” he suggested.
He regretted that trade relations between the two countries were not according to the existing potential due to sanctions. “There should be no embargo on Pakistan-Iran trade as other countries of the world are doing trade with Iran,” he said, adding that Iran’s trade with other regional countries is higher as compared to Pakistan.
He identified that Pakistani rice, wheat, fruits, dry fruits, mangoes, textiles items, petrochemical, livestock, meat and dairy products have great demand in Iran.
Sharing views on the originally proposed Iran-Pakistan-India gas pipeline, which is now Iran-Pakistan gas pipeline, he said that the progress on this mega project on cost sharing basis between the two countries is slow. Iran had laid 1,200 kilometres pipeline from Bander Abbas up to Balochistan border but the international pressure and other factors are affecting the progress.
Iran being the neighbour can give energy in 10 cents to Pakistan, he said, adding that initiatives were required to formalise undocumented trade between two countries.
Haroon Agar, president of the KCCI, stressed the need to form Karachi-Tehran Joint Chamber of Commerce and Industry to explore the huge trading potential between the two neighbouring countries.
He called for introducing banking channel and make arrangements for currency swap to enhance Pakistan-Iran bilateral trade. He also urged for measures such as economic integration and reduction in transaction costs, port-to-port activities and customs mechanism to expand the volume of bilateral trade.
Agar urged to activate and develop regional trading bloc of the ECO countries, particularly between Pakistan, Iran and Turkey, and proposed that the trade between Pakistan and Iran should be permitted in local currencies instead of dollars and the trade through railways and road be regularised. Pakistan being energy-hungry country, should seriously consider implementation of Iran-Pakistan gas pipeline project, which is the need of the hour to overcome the energy crisis and for industrialisation, said Agar. The status of $7.5 billion Iran-Pakistan gas pipeline can enhance the economic relationship with Iran, he said, and highlighted the existing tremendous potential for Pakistan-Iran bilateral trade and identified possibilities of joint ventures in the value-added agricultural, mining and engineering sectors.
To enhance bilateral economic and commercial cooperation, he called for establishing banking channel as the business transactions between the two countries is routed through Asian Clearing Union, which is more time-consuming than a normal letter of credit (LC), while opening a LC through Iran’s sister companies in Dubai also adds to the cost.