Pakistan and Iran push toward US$10bn trade target and Free Trade Agreement at Islamabad talks

Summary

Pakistan and Iran held trade talks in Islamabad on August 4, with both sides reaffirming a target of raising bilateral trade to US$10 billion, Geo News and The Express Tribune reported. Iran's minister said the Pakistan-Iran Free Trade Agreement is progressing "well" and expected to conclude "in the near future." Tehran proposed expanding logistics cooperation through Pakistan's Karachi and Gwadar ports. Pakistan's National Assembly Speaker Ayaz Sadiq invited Iran's parliament speaker Bagher Ghalibaf to visit Islamabad, deepening the parliamentary track of the engagement. The talks come as both countries push to normalise economic ties after years limited by sanctions-related payment barriers.

Why it matters

The Gwadar angle is the most consequential thread: a functioning Iranian-Pakistani trade corridor through Gwadar would give Iran a sanctions-circumventing logistics route and deepen Pakistan's energy exposure to Iran at a moment when the Iran-US negotiations remain unresolved. The US$10bn target represents roughly a four-to-five-fold increase over current bilateral trade volumes and would require dismantling banking and currency settlement barriers that US secondary sanctions have enforced for years.

What to watch

• Timeline for Pakistan-Iran FTA conclusion and whether Ghalibaf accepts the Islamabad invitation
• How the Iran-US negotiations affect Pakistani willingness to deepen ties with Tehran
• Whether Gwadar logistics integration moves from announcement to operational planning
• Pakistan's internal debate on the US sanctions risk of deeper Iranian economic ties