Economy, Business And Markets

Pak Businesses Want Smooth Banking Links

Pak Businesses Want Smooth Banking LinksPak Businesses Want Smooth Banking Links

The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has urged the country’s  central bank to streamline banking channels with Iran in order to facilitate bilateral trade as a nuclear deal between Tehran and world powers provides an opportunity to deepen ties with the neighbor.

Speaking to Iranian Embassy commercial attaché, Mostafa Razavi Zadeh, the chairman of FPCCI standing committee on horticulture and food exports, Ahmad Jawad, stressed that trade was the key to strengthening relationship between the two countries, the Express Tribune reported Thursday.

“The FPCCI has always shown importance and strongly advocates robust economic relationship with Iran. In today’s scenario, without economic activity no economy can survive,” he said.

The economic relationship between Pakistan and Iran is mutually beneficial as the former needs oil and gas and the latter requires agricultural products. However, before moving ahead the two sides should start upholding the preferential trade agreement (PTA) they had agreed on.

Jawad suggested that the Iranian Ministry of Industries and Trade  may look into the issue as in the past seasonal bans were imposed on purchase of Pakistan’s agricultural products. “The PTA framework should be executed in letter and spirit,” he said.

Though the two countries have a great trade potential, the current volume of bilateral commerce stands far lower and for that unavailability of banking channels is partly to blame. “But we should take a look at other factors as well,” Jawad said.

In 2013-14, bilateral trade stood at its lowest level at $218 million. If illegal trade through the Taftan border was estimated at $1.2 billion, then the volume could be boosted to $5 billion per annum through compliance with the PTA framework, he said.

Jawad suggested that a delegation from Iran and the Mashhad chambers of commerce should visit Pakistan and engage in business-to-business interaction with the FPCCI and allied chambers. “This will enable the private sector of both countries to come on the same page.”

Praising the FPCCI for playing a constructive role, Razavi Zadeh said Iran wants to increase trade with Pakistan, but the State Bank of Pakistan (SBP) should take an initiative and establish banking links.

“Iran’s central bank is ready to move forward,” he said. “Iran has been enjoying trade through banking channels with India and Turkey, why has Pakistan not adopted the same system?”

He pointed out that negotiations were under way with the relevant ministries to step up purchase of Pakistan’s agricultural products, mainly rice and oranges, in line with Iran’s food safety standards.