Iran and Pakistan have strong potential to expand bilateral trade thanks to their shared border, cultural ties, and complementary economies. However, sanctions, weak trade coordination, inadequate border infrastructure, and logistics challenges continue to limit trade growth. Enhancing connectivity and regional cooperation is essential to unlocking the full potential of Iran–Pakistan economic relations.
Iran–Pakistan Trade Relations
Iran and Pakistan possess significant potential for expanding bilateral trade, but several structural barriers continue to limit economic cooperation despite the Preferential Trade Agreement.
Key Challenges
- Outdated railway infrastructure and incompatibility of cross-border rail networks.
- Banking and payment restrictions due to sanctions and financial transfer difficulties.
- Long distances between border crossings and Pakistan’s major economic centers.
- High levels of informal trade, particularly in the energy sector.
- Security and political challenges along border regions.
- Logistics inefficiencies and high transportation costs in Pakistan.
- Overreliance on road transport, reducing supply chain efficiency.
Emergency Measures to Strengthen Iran–Pakistan Trade
Pakistan can support Iran’s trade resilience during regional crises through:
- Increased imports of rice, livestock, and red meat.
- Use of Pakistan as a transit corridor for essential goods such as palm oil and soybeans.
- Development of border logistics and processing facilities.
- Temporary utilization of Gwadar Port to facilitate imports.
These measures can enhance food security, supply chain stability, and regional trade connectivity.
Deepening Iran–Pakistan Trade Relations
Doubling bilateral trade within the next decade requires upgrading rail, road, and customs infrastructure, improving border coordination, and facilitating trade through modernized logistics networks. Strengthening partnerships with Pakistan’s influential private-sector organizations and business associations is also essential for expanding long-term economic cooperation and market access.
This study is conducted at The Eye of Makoran Developmentsin collaboration with Yasin Karimian and Maryam Fatemian in 2026.
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