WHILE the government takes comfort in rhetoric and the industrial elite is evaluating the impact, progressive farmers and traders are indeed elated. They all see a big opportunity to reclaim the huge Iranian market they lost to economic sanctions. And exporters are eagerly waiting for the opening of banking channels for expanding trade with the neighbouring country.

With exports stagnant, agriculture under distress and energy crisis persisting, many see this opportunity as a ‘God sent’. They want to pounce on it as soon as banking channels are streamlined. They expect exports to Iran surge from the low base of $54m to over $200m during this calendar year with potential to touch $800m next year.

Iran came out of its long distressing economic isolation after the nuclear-related sanctions were lifted last week, enabling it to reappear on the global trading and investment circuit while reclaiming scores of billions of dollars worth of frozen assets.

Tehran announced to hike oil production by 500,000 barrels a day after the sanctions were annulled and hoped to increase its export to 2.5m barrels. It expects the country’s GDP to grow by 5pc in two years. Also expects to save the cost of trading in billions as it was forced to sell goods cheaper to share cost of risk borne by the partner nations.

Iran did enjoy limited economic relations during the difficult time (1979-2015) with some countries that either secured exemptions from sanctioning countries and global institutions or succeeded in securing trade deals that did not involve banking services. The UAE, China, Turkey and India were the most prominent trading partners of Iran in that phase.

US clamped sanctions on Iran as far back as 1979 after the Islamic revolution. They were expanded in 1995 to include firms dealing with the Iranian government. In 2006, the UN imposed wide ranging sanctions that lead to it near-seclusion from the global economy.

In the absence of supporting trade data, Commerce Minister Khurram Dastgir Khan was high on verbosity. After two years of shuttle diplomacy, the total trade with the ‘preferential partner’, dropped to under $200m last year. It was $1bn in 2007 when UN sanctions were applied and almost halted in 2012. Currently Pakistan exports to Iran are worth $40m. Informal trade estimates show worse balance of trade.

“I am hugely optimistic. We have done our homework and prepared the ground for deeper relationship. I met Iranian Ambassador Mehdi Hunardoost and proposed to initiate negotiations on free trade agreement (FTA) to boost bilateral trade,” he told Dawn over phone without divulging the benefits of preferential trade agreement (PTA) signed in 2006.

“The government will swiftly initiate the work on gas pipeline as now the financing can be arranged through banks. We are looking at building several crossing points along border to facilitate two-way movement of goods. I will not be surprised if bilateral trade surges to pre-sanction level by the year end,” he said.

The commerce minister said the State Bank could tell how long it would take for banking channels to become operational.

Without mentioning when it intends to brief commercial banks, the SBP responded to Dawn query thus: “SBP in the capacity of bank regulator would play its role of facilitator for commencement and enhancement of trade between the two countries. Besides, expansion in banking facilities, bilateral investment is also expected to increase”.

Not everyone in the business circles was comfortable with the proposed Pakistan- Iran FTA draft in circulation that experts found one-sided and hurtful for the local industry.

Arif Habib, head of Arif Habib group of companies, in a light hearted comment said: “The day banking channels open Pakistan will be asked to settle outstanding payments to Iran,” hinting at $200m that the country owes on account of purchase of electricity and implying it to be a reason behind lack of urgency in the SBP.

Most business leaders described Iran situation as ‘an opportunity’ but were not yet ready to explain how? Some executives desperate to sell ‘optimism’ interpreted the gloomy oil price outlook as Iranian oil starts flowing in bigger volumes in the global market as something to be happy about. For them, it did not mean just oil bill savings but higher consumer disposable income in Pakistan instantly expanding the size of the local market.

Ehsan Malik, CEO Pakistan Business Council, was full of hope. “I believe cheap energy means deeper consumer pockets. It also means surge in demand for textiles, footwear and other goods and services”, he commented.

Junaid Hyder Shah, a progressive farmer of Sindh, who exported 50 tonnes of mangoes to Iran last year, hoped to push the size of consignment to 200 tonnes this year. “Last year experts from Iran visited many certified farms in Multan and Mirpurkhas. My partners in Iran are willing to send better-equipped-consignment carriers to lift mangoes from my farms. We have started working on trade plans to seize the opportunity”, he said over phone.

Anis Majid, a leading commodity exporter of Karachi, also sees scope for scaling up exports to Iran. “There is a possibility of exporting well over 200,000 tonnes of additional rice to Iran channelizing exports through both land and sea routes”.

Syed Hasan Reza, a leader of All Pakistan Meat Exporters and Processors Association, told Dawn from Lahore of the untapped potential for a wide variety of raw and processed products to Iran.

“We are ready as sanitary and standard compliance issues have been addressed to improve the quality of animals and handling of meat. There is ample demand and you will see meat exports shoot up as soon as banking opens up.”

Published in Dawn, Business & Finance weekly, January 25th, 2016