Pakistan Must Remove Banking, Logistics and Policy Barriers to Unlock Iran Trade: BMP

By Dr. Ansab Ali

LAHORE: Pakistan must urgently remove banking restrictions, logistics bottlenecks and policy barriers to unlock the full potential of bilateral trade with Iran, the Federation of Pakistan Chambers of Commerce and Industry’s (FPCCI) Businessmen Panel (BMP) said on Sunday.

The group said the formal notification of Taftan Railway Station as a land customs station should be viewed as the beginning of broader trade reforms rather than a complete solution.

Former FPCCI president and BMP Chairman Mian Anjum Nisar said the government’s decision to formalise customs operations at Taftan would have limited impact unless accompanied by major improvements in border infrastructure, customs modernisation, transport connectivity, warehousing facilities, digital clearance systems and practical financial settlement mechanisms.

“The business community has consistently called for comprehensive trade facilitation instead of isolated administrative measures,” he said.

Mian Anjum Nisar noted that Pakistan and Iran have repeatedly expressed their intention to increase bilateral trade to $5 billion, but actual trade remains well below that target due to longstanding structural challenges. He identified international banking restrictions, the absence of reliable payment channels, cumbersome customs procedures, inadequate rail and road connectivity and weak border infrastructure as key obstacles discouraging formal trade.

He said Taftan remains Pakistan’s principal land gateway to Iran and has the potential to develop into a regional trade corridor linking Pakistan with Iran and Central Asian markets. However, he stressed that this objective cannot be achieved through official notifications alone without parallel investment in modern cargo terminals, scanning equipment, container handling facilities, cold storage, quarantine services and integrated customs operations.

The BMP chairman said rail-based freight transport offers significant economic advantages by lowering transportation costs, reducing transit times and improving supply chain efficiency, particularly for bulk commodities such as minerals, agricultural products, petroleum-related goods and construction materials. However, he added, these benefits will remain limited unless railway infrastructure and freight services are upgraded to international standards.

Mian Anjum Nisar described the lack of an effective banking mechanism as one of the biggest hurdles to expanding legitimate trade with Iran. Despite available business opportunities, exporters and importers continue to face difficulties in settling payments because of sanctions-related financial restrictions.

He urged policymakers to establish practical and internationally compliant payment mechanisms that facilitate legitimate commercial transactions while ensuring Pakistan meets its regulatory obligations.

He also called for simplified customs documentation, fewer unnecessary inspections, shorter cargo clearance times and fully digital customs processing at border crossings. Efficient customs administration, he said, would lower the cost of doing business and encourage traders to shift from informal channels to documented trade.

According to the BMP chairman, informal cross-border trade continues to flourish because legal trade remains comparatively slow, costly and administratively burdensome. Making formal trade more efficient and commercially attractive would increase government revenues while improving regulatory oversight, product quality standards and supply chain transparency.

Mian Anjum Nisar further called for stronger coordination among the Federal Board of Revenue, Pakistan Railways, border management authorities, provincial governments and the private sector to ensure timely implementation of trade policies. He said businesses require predictable regulations, efficient logistics and reliable transport infrastructure to make long-term investment decisions.

He noted that Pakistan has significant export opportunities in textiles, pharmaceuticals, processed food, engineering products, surgical instruments and construction materials, while imports from Iran could help meet domestic demand for energy products, petrochemicals and minerals. However, he warned that these opportunities would remain underutilised unless longstanding commercial barriers are removed through a comprehensive trade facilitation framework.

The BMP chairman also urged the government to consult chambers of commerce, exporters, importers, transporters and logistics companies while designing future trade policies so that reforms reflect practical business realities.

He concluded that Pakistan has an opportunity to transform Taftan into a modern regional trade gateway, but achieving that goal will require sustained policy implementation, infrastructure investment and institutional coordination. Without decisive action to remove banking, logistics and regulatory barriers, he said, the country’s ambition of significantly expanding trade with Iran will remain out of reach.