ISLAMABAD: Prime Minister Shehbaz Sharif on Tuesday expressed hope a newly inaugurated border crossing between Pakistan and Iran in Panjur would encourage legal trade between the two neighboring states and help curb smuggling, which has long plagued the region.

Pakistan and Iran have intensified efforts in recent years to expand bilateral trade by establishing border markets and implementing barter trade mechanisms.

In April last year, Iran’s late President Ebrahim Raisi described the existing trade volume between the two countries as “not acceptable” during his visit to Pakistan. He said his government had agreed with Islamabad to boost bilateral trade to $10 billion within the foreseeable future.

In the absence of adequate formal trade, smuggling has become a significant issue along the porous 959-kilometer border, where local communities on both sides often rely on the illicit trade of goods, particularly Iranian fuel.

“A new crossing has been inaugurated at the Pakistan-Iran border in Panjgur, which will promote legal trade and help curb smuggling,” Sharif said during a federal cabinet meeting in Islamabad, referring to the new opening this month in the Kohak-Cheedgi area of Panjgur. “I thank our brotherly country Iran for their full cooperation in this regard.”

International sanctions, particularly those imposed by the United States, have significantly hampered economic collaboration between the two countries. This is particularly evident in the shape of the stalled Iran-Pakistan gas pipeline project. While Iran completed its section in 2011, Pakistan halted construction due to fears of US sanctions, stalling a project that could have alleviated Pakistan’s energy shortages.

According to the Institute for Strategic Studies, Research and Analysis, a local think tank in Islamabad, trade between the two countries has also suffered owing to the same reason.

Iran’s exports to Pakistan were approximately $1.4 billion in 2022, while Pakistan’s exports to Iran stood at $842.8 million.

The think tank also says Iran’s exports to Pakistan have grown at an annual rate of 13.5 percent over the past 24 years, whereas Pakistan’s exports to Iran have declined by up to 44 percent annually.

During Raisi’s visit, both sides signed memoranda of understanding and agreements covering fields such as trade, science, technology, agriculture, health and culture.

The visit was also seen as a step toward mending fences between the two nations, which had experienced strained ties following unprecedented tit-for-tat missile strikes earlier that year.