KARACHI: Sanctions-free Iran offers massive trade opportunities, but to tap this market Pakistan exporters need to actively pursue prospects and improve product quality, suggested PAIR Investment Company MD and CEO Nadeem Karamat.
“Pakistan can export millions of dollars of rice, meat and meat products, auto parts and many other goods to Iran. There is a fair chance that Pakistan could replace the countries that are currently selling these products to Tehran,” Karamat said while speaking at the Pakistan-Iran Opportunity Forum on Thursday.
The event was organised by the Pakistan Business Council (PBC) in collaboration with the Ministry of Commerce.
Iran imports automobile-related products valuing over $3 billion per annum as well as meat worth $400 million that Pakistan could also export to the neighbour.
“Iran buys a huge quantity of meat from Argentina; our meat exporters can tap this market but they need to improve quality in line with the Argentinian meat,” said the CEO of PAIR – a joint venture investment company established in 2007 by the governments of Pakistan and Iran.
Pakistan’s trade with Iran had dropped significantly in the past few years in the wake of tightening of international sanctions after 2008. It declined much more faster than Iran’s trade with Turkey, China and India because the volume was already too low, said Karamat in reply to a question.
PBC Chairman Atif Aslam Bajwa noted that Iran was taking a far greater advantage of the existing preferential trade agreement (PTA), leading to a massive disparity in Pakistan’s imports and exports.
Trade between the two countries is governed under the PTA, which has been in force since 2006. Of the top 50 items that Pakistan exports to Iran, only 12 (24%) enjoy preferential tariff and among the top 50 items that Iran exports to Pakistan, 22 (44%) attract preferential tariff.
Trade Development Authority of Pakistan Secretary Rabiya Javeri Agha expressed optimism that Pakistan could regain its lost market share in rice, vegetables and fruits, meat and other products despite India’s strong foothold in Iranian markets.
“Our rice exporters are going to visit Iran soon to look for opportunities there. Other traders including textile manufacturers are also in continuous contact with their Iranian counterparts,” she added.
Some experts and exporters, who were present on the occasion, were of the view that Pakistan had already lost a huge rice market to India since 2008 and the government was still not doing enough to remove the pre-sanctions era bottlenecks to trade with Iran.
Iran is the second largest economy in the Middle East and North Africa (Mena) region after Saudi Arabia and its exports were worth $73.9 billion while imports totalled $53.7 billion in 2014.
Trade between Pakistan and Iran has been consistently shrinking for the past five years. There is also a huge discrepancy in data that indicates the smuggling of goods between the neighbours.
In 2014, Iran reported exports of goods valuing $837 million to Pakistan while Pakistan put imports from Iran at just $185 million – 22% of Iran’s figure.
Similarly, Iran reported imports of goods worth $261 million while Pakistan showed exports at just $43 million – 16.5% of Iran’s figure, according to data gathered by the PBC, a business policy advocacy forum representing Pakistan’s 47 largest enterprises. http://tribune.com.pk/story/1072354/opportunities-fair-chance-to-outwit-competitors-in-irans-market/
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