Trade, electricity and people cross the border between Iran and Pakistan every day. Trade has grown to more than $3bn, according to Iranian officials who spoke in August, and both governments agreed a $10bn target on 4 and 5 August, The News reported.
The frontier runs roughly 900 kilometres, from the Koh-i-Malik Salih mountain to Gwadar Bay on the Gulf of Oman, through Balochistan on the Pakistani side and Sistan and Baluchestan on the Iranian. Informal commerce has long been established across it.
The goods that move are of a familiar kind. Before sanctions on Iran tightened, Pakistan exported rice, meat, paper, textiles, fruit and surgical goods to Iran and imported chemicals, plastics, oil and iron and steel products. Formal trade passed $1.2bn in fiscal 2010, before banking restrictions cut formal flows sharply. Since March, the two countries have eased customs procedures, formalised Taftan as a customs station and notified new transit routes. In April, Pakistan’s commerce ministry notified six routes for carrying goods to Iran through Gwadar and Karachi. In August, Pakistan opened a customs station at Jeerak in Panjgur district as the fifth crossing point, and on 5 August the two sides agreed to keep crossings open round the clock.
Electricity is the second commodity. Pakistan buys about 100 megawatts from Iran for areas bordering it. On 6 August, Power Minister Awais Leghari discussed a second cross-border transmission line and an expansion beyond that figure. He praised Iran for uninterrupted supply despite the regional security situation and called imports integral to long-term planning for Gwadar. Leghari said Gwadar’s development depends on reliable electricity and that its network needs further investment.
The groundwork is older. In May 2023, then Iranian President Ebrahim Raisi and Prime Minister Shehbaz Sharif jointly opened a border market and a transmission line at a crossing, one of six planned border markets, when trade stood near $2bn. Pakistan’s commerce minister has said joint border markets and electronic data interchange systems could lift trade further.
Iran wants the Pakistani ports as much as Pakistan wants the power. Industry Minister Mohammad Atabak told the August meeting that Tehran wished to expand cooperation through Karachi and Gwadar, and called Pakistan a long-term strategic trade partner. The US-Iran conflict has disrupted Strait of Hormuz routes, and the border markets and barter arrangements, meant to bring informal trade onto legal ground and offer a means of exchange outside restricted banking channels, serve the same purpose on a smaller scale.
The Mecca pact has not changed any of this by announcement. The three members activated it on 5 October to deploy forces to Saudi Arabia, and neither Pakistan nor Iran has announced a review of trade, customs stations or electricity supply. Iran’s foreign ministry spokesman said on 4 October that he hoped reports of a Pakistani deployment for war in Yemen were untrue. Javad Heiran-Nia of the Persian Gulf Studies Group in Tehran says Iran’s red line concerns offensive operations against the Houthis in Yemen, not the defence of Saudi territory.
Security concerns have always limited the trade, along with sanctions, banking restrictions and thin transport infrastructure. The Pakistani Taliban are a pressing problem for Islamabad, which gives it reasons of its own to keep a second frontier quiet, though no one has stated that as policy.
Whether the second transmission line will be built on schedule, whether the free trade agreement will be concluded, and whether the Mecca pact will alter either are open questions. Officials said in August that technical negotiations on the agreement were under way, and Leghari’s statement that Iranian electricity would remain integral to planning for Gwadar has not been withdrawn.