Iran, Pakistan plan fourfold increase in trade

Tuesday, 18 January 2011 00:01 - - {{hitsCtrl.values.hits}}

TEHRAN (MNA)-The Pakistani prime minister stated last week that Islamabad is ready to increase business and trade with Iran from $1 billion to $4 billion annually.

IRINN quoted Yousuf Raza Gilani in a meeting with Iranian Commerce Minister Mehdi Ghazanfari in Islamabad as saying trade level must reach $4 billion in five years.

He also welcomed the initiative of founding an Iranian bank in his country.

Gilani claimed that the Pakistani finance and commerce ministries have been directed to help establish the Iranian bank in Pakistan.

The Pakistani official highlighted his country’s eagerness to expand trade with Iran and said trade and commercial ties with neighboring countries is one of the priorities of Islamabad.

Ghazanfari cited the absence of an Iranian bank in Pakistan as one of the main obstacles for increasing the bilateral trade.

Karachi Chamber of Commerce and Industry President Abdul Majid Haji Mohammad told the Pakistani paper The News one year ago that the lack of a banking system remains a the major obstacle to Iran-Pakistan trade.

In May 2009, Iran and Pakistan signed a purchase agreement stipulating that Iran will initially transfer 30 million cubic meters of gas to Pakistan per day, with the volume eventually increasing to 60 million. The deal ensures gas supplies to Pakistan for a period of 25 years. On June 13, 2010, the two sides formally concluded the $7.5 billion agreement despite objections of U.S. Special Representative for Pakistan and Afghanistan Richard Holbrooke, who had cautioned that although the “U.S. understands that Pakistan faces [a] major energy crisis... new sanctions on Iran can impact Pakistan.”

According to a previous Pakistani Petroleum Ministry statement in May 2010, “the capital cost for the Pakistan section is estimated at $1.65 billion… [and] the first gas flow is targeted by the end of 2014,” with Iran completing the project ahead of schedule.

Iran has agreed to deliver 21.2 million cubic meters of natural gas per day to Pakistan.