Pakistani Business Community Awaits End of Iran War to Resume Trade

On July 22, the escalation of the conflict in Iran has put immense pressure on the Pakistani business community. The breakdown of the ceasefire agreement has caused a backlog of goods such as mangoes and textiles destined for Iran at the border, with some fruits already rotting. Business leaders have stated that peace would lead to a decrease in energy prices and provide opportunities for Pakistan to develop trade potential along its approximately 900-kilometer border with Iran. The Pakistani economy has been under continuous pressure due to strained relations with India and Afghanistan, and the business community had hoped to alleviate the situation by deepening trade with Iran. However, long-standing U.S. sanctions on Iran have restricted banking settlements, energy cooperation, and trade exchanges between the two countries, resulting in a heavy reliance on barter, third-party transshipment, or smuggling channels for trade. The Pakistani business community believes that if sanctions on Iran are eased in the future, the scale of trade between the two countries could significantly expand. Pakistan could export rice, textiles, pharmaceuticals, and medical devices to Iran, while Iran could provide Pakistan with cheaper oil and gas, creating opportunities for Pakistani companies to participate in post-war reconstruction in Iran. Currently, several entrepreneurs have indicated that they will continue to remain cautious until the situation becomes clearer.

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