KARACHI: Pakistan’s trade with Iran has been hit hard, as it fell sharply during the last 20 months, indicating country’s weak approach towards regional trade.

Pakistan still depends largely on Western partners for trade.

Trade with Iran in 2009-10 was to the tune of $1221 million which fell to just $439 million last year. However, official trade data released on Friday showed that trade with Iran is declining further.

The State Bank reported that trade with Iran during July-February, 2011-12 fell to $158 million while the same for eight months of the previous year was $320 million.

Iran is facing sanctions by US and its European allies, making the country unable to sell its oil products in the region. Country’s central bank has been isolated, and is unable to operateat international level.

Pakistan is also facing pressure from US to stop gas import plan from Iran through a pipeline project.

China has denied investment for the project while Pakistan is struggling to continue this project with alternate financing arrangements.

A number of analysts said country’s falling trade with Iran could be an outcome of pressure from the countries pressing Iran to accept their conditions to abandon its nuclear programme, which was rejected.However, others said Pakistan’s approach towards regional trade has never been encouraging as it was obvious from its trade ties with other regional countries, like India, China and Afghanistan.

Pakistan’s imports from Iran have been dominant in this bilateral trade as in 2009-10 trade volume stood at $1,221 million and imports at $1017 million.

During the last eight months, exports to Iran remained constant at $82 million while imports fell to $76 million from $238 during the same period of corresponding period.

“Iran is a different case, but India is our competitor as both the countries are major producers of cotton and manufacturer of textile-based products,” said Aamir Aziz, a textile manufacturer and exporter.

India being one of the largest markets, slightly lower than China, has attraction for Pakistan, but a segment of the business community, including manufacturers and traders, has reservations while trading with India.

Their fears are based on assumption that India would make Pakistan a market as it did with Bangladesh. The fear might have some weight, but it also shows weakness of Pakistani competitors.

At the same time, some political elements have also started showing resistance to declare India a most favourite nation for business. Some manufacturers and traders having monopoly in Pakistan also fear that trade with India would either erode their business or reduce their profitability.

“There is a need to assess the impact of trade relations with India as the country is already at a advantageous position while trading with Pakistan.

“Imports from India are higher than exports from Pakistan,” said Aamir.

Business community supports to enhance trade with Iran as the country is not a competitor while the market has potential to absorb exports of textile-based products plus commodity like rice, wheat and sugar from Pakistan.