Iran-Pakistan to sign Free Trade Agreement

Iranian Ambassador Dr Reza Amiri Moghadam has indicated that a Free Trade Agreement (FTA) is likely to be finalized in the upcoming visit of Iranian President Ebrahim Raisi to Pakistan.

Addressing the business community during his visit to the Islamabad Chamber of Commerce and Industry (ICCI), the Iranian envoy said the FTA would increase mutual trade and several bilateral economic and trade agreements would also be signed during the visit.

He also said that the two countries need to have strong air, maritime and sea links, which will strengthen the economic relations and Pakistan, will also be connected to regional and global trade.

The ambassador emphasized the closeness of maritime links, especially Karachi and Gwadar and Chabahar and Bandar Abbas ports and said that Gwadar and Chabahar should be declared as sister ports.

The current bilateral trade volume paltry US$2.5 billion. Pakistan and Iran can fulfill 70% of each other’s needs by engaging in mutual trade, just as Iran imports halal meat, Pakistan can do a lot of work in Iran in this sector.

“After the FTA and bilateral agreements for the promotion of mutual trade, there is a strong possibility that the mutual trade between Pakistan and Iran would reach US$5 billion in the next few years,” he added.

The envoy added that the Pakistan-Iran gas pipeline was a significant project, which would benefit both the domestic and industrial sectors of Pakistan.

“Iran is serious about resolving Pakistan’s energy problems and that is why Tehran completed the gas pipeline project for US$1 billion in 2009 so that Pakistan could meet its energy needs,” he said, adding that it was essential that the project is completed at the earliest.

He added that Iran was already trading in gas and the energy sector with Turkiye, Turkmenistan and Azerbaijan, therefore Pakistan can also follow the procedure adopted by these countries.

He acknowledged that the banking channel between Pakistan and Iran was a serious issue, but Iran has banking links with Turkiye, Bahrain and Iraq.

 

India-Israel: Three decades of strong ties

In year 2022, Israel and India are celebrating the 30th anniversary of their full diplomatic relations. In the last three decades, bilateral trade has increased from US$200 million in 1992 to over US$7.86 billion in 2021-22. It is expected to rise sharply once the free trade agreement is concluded.

India is attractive to Israeli businessmen. The economic relations, once dominated by defense, diamonds and drip irrigation are now driven by hi-tech, cyber security, innovation and mobility.

India’s emergence as one of the fastest-growing major economies, its democratic character and its maturing relations with the United States and Gulf countries makes it an attractive proposition for Israeli businesses.

More direct flights and opening of new routes with the Gulf airlines have significantly increased tourism in both directions.

The launch of the I2U2 group has multiplied the avenues of cooperation. It addresses the issue of financing the use of cutting-edge Israeli technologies in the price sensitive Indian market.

The Israeli TV series Fauda is wildly popular in India, which spawned an Indian remake, Taanav. The road is paved for more collaboration in the areas of cinema and entertainment.

Indians have become the largest contingent of foreign students studying in Israel.

Start-up entrepreneurs from Israel and India are extremely successful in Silicon Valley, and they get along well with each other due to numerous common values.

It has a spillover effect. A number of delegations of Indian CEOs and Family Offices have started visiting Israel on a regular basis.

The successful bid by India’s Adani Group and Israel’s Gadot Group to purchase Haifa port has paved a way for cooperation on large infrastructure projects.

Logistic issues limiting Tehran Dhaka trade

Gholam-Hossein Shafeie, Head of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA), has said tariff barriers and transportation problems are the main factors that are hindering Iran-Bangladesh trade relations.

Shafeie made the remarks in a meeting with Iran's new Ambassador to Dhaka Mansour Chavoshi in Tehran. Chavoshi, who has been newly appointed as Iran’s envoy in Bangladesh, visited ICCIMA to discuss ways to strengthen trade and increase the volume of trade exchanges between Iran and Bangladesh, before leaving Tehran for his mission.

During the meeting, Shafeie mentioned Bangladesh’s acceptable economic growth in recent years and assessed the future economic prospects of the country as positive. He emphasized the need to improve the trade infrastructures of the two countries for the development of mutual cooperation.

The ICCIMA Head further pointed to common areas for economic cooperation such as transportation, construction materials such as bitumen and cement, fuel, investment, clothing and textile, agriculture, herbal medicines, and medical devices, saying that the two sides should take all the necessary measures to benefit from these capacities.

According to Shafeie, Bangladesh has established tariff exemption treaties with some countries including the members of the European Union, and therefore, in order to facilitate trade with the Islamic Republic, it is necessary to implement a similar preferential trade agreement that has already been approved by the two countries.

Referring to the recent trip of an Iranian trade delegation to Dhaka to participate in the meeting of the chambers of commerce of the D-8 organization, he said, “This delegation discussed cooperation programs, including the reduction of trade tariffs and the cancellation of business visas among the members of this organization. It was also announced that the next round of the meeting of the D-8 Chambers of Commerce would be held in Tehran, and it was welcomed by other chambers.”

“One of the measures that the ICCIMA has had on its agenda was the formation of a joint Iran-Bangladesh trade committee, which fortunately was approved by the chamber's board of directors this week, and this committee will be formed soon,” he announced.

Chavoshi for his part emphasized the importance of Iran-Bangladesh relations and pointed to the great advantages that Iran can benefit from cooperation with this country.

“One of the positive factors in cooperation with Bangladesh is the fact that the people of this country have a very good attitude towards Iranian goods and the country’s businessmen, and this can be built upon to strengthen and develop relations between the two countries,” the envoy said.

 

 

Iran-Eurasian Economic Union trade reported at US$1.4 billion in 8 months

The value of non-oil trade between Iran and members of the Eurasian Economic Union (EAEU) were US$1.4 billion during the first eight months of the current Iranian calendar year (March-November 2020) as per data released by Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIMA). Trade with Eurasia accounted for 2.8% of the country’s total non-oil trade in the mentioned period.

According to details, Iran exported 1.8 million tons of commodities worth US$639 million to the EAEU members in the period under review, registering a 20% fall in terms of weight and a 6% decline in terms of value. The country’s trade with its Eurasian partners declined 11% as compared to the previous year’s same eight-month period.

During this time span, Iran's exports to Russia and Belarus increased significantly in terms of weight and value, while exports to three other countries, namely Armenia, Kyrgyzstan, and Kazakhstan, decreased.

Eurasian destinations accounted for only 2.4 percent of Iran’s total exports in the first eight months of the current year, according to the said data.

Among Eurasian trade partners, Russia was Iran's top export destination with US$285 million, followed by Armenia with US$233 million worth of imports from the Islamic Republic, while most of Iran's imports also came from Russia (US$727 million).

Iran and Eurasian Economic Union reached a free trade agreement in October 2018 based on which about 862 commodity items were subjected to preferential tariffs. The interim agreement enabling the formation of a free trade area between Iran and the EAEU was signed on May 17, 2018, and officially came into force on October 27, 2019.

Iran is a very important market in the region and the development of ties with this country is of high significance for the EAEU members (Russia, Belarus, Armenia, Kazakhstan, and Kyrgyzstan).

The free trade agreement between Iran and the Union has laid the ground for the expansion of trade ties between the two sides.

The agreement with the bloc has increased Iran’s exports to the EAEU member states significantly, which is a turning point for the Islamic Republic's plans for boosting non-oil exports during the US sanctions.