PAKISTAN – IRAN

RELATIONS
By Sir Farrukh Sultan
Editor-in-Chief ‘The World Today’

Introduction

Pakistan and Iran share a complex and multifaceted relationship shaped by geographic proximity,
historical ties, and shared cultural and religious bonds. Both countries are located in a volatile region,
with strategic significance and overlapping security concerns, including Afghanistan and the broader
Middle East. The bilateral relationship has seen periods of cooperation and tension, largely influenced
by geopolitical shifts, sectarian dynamics, and foreign policy alignments. While trade, energy
cooperation, and border security have been key areas of collaboration, divergences, particularly
concerning alliances and regional influence, occasionally challenge their partnership. Despite these
challenges, Pakistan and Iran continue to engage diplomatically, striving to balance their national
interests while navigating regional complexities. Tthe narrative of Pakistan-Iran relations
are divided in three phases: 1947-1979, 1979-2000 and post-9/11.

Phase I - (1947-1979): An Era of Harmony

1. Political and Strategic Ties

After emergence as an independent State on August 14, 1947, the deep-rooted historic bonds became
even more significant when Iran established its diplomatic relations with Pakistan in May 1948, and
Pakistan's Prime Minister Liaquat Ali Khan visited Iran in May 1949. The Shah of Iran was the first head
of State to pay an official visit to Pakistan in March 1950, and the same month the foundations of relations
between the two countries were laid down in the Pakistan-Iran Friendship Treaty signed in May 1950.
Throughout the 1950s, the relations grew closer as the two countries signed a cultural agreement in
March 1956, an air travel agreement in 1957, and a border agreement in February 1958. High-level
contacts blossomed over 1950s and the 1960s. These contacts were cemented even further with the
signing of the US-led Baghdad Pact in 1954 between Pakistan, Iran and Turkey, which was renamed as
CENTO in 1955. Despite the fluctuations in political and strategic relations, economics continued to hold
sway in the bilateral relations which got further impetus with the signing of the RCD in July 1964 between
Pakistan, Iran and Turkey in order to strengthen their socio-economic development.

Phase II (1979- 2000 )

2. Era of Mixed Feeling: Divergent Political and Ideological interests

Following the Islamic Revolution, the departure of Mohammad Reza Shah Pahlavi in January 1979 and
the subsequent US sanctions, and Pakistan‟s close relations with Saudi Arabia, the 1990‟s were an
unequal patch in the bilateral relations due to competing and diverging geopolitical and ideological
interests. Thus, while Pakistan and Iran had worked together to support the Afghan Mujahedeen, against
the Soviet Union, Pakistan‟s anti-USSR efforts that were heavily supported by Saudi Arabia, Kuwait and
the US, did not sit well with Iran. Pakistan and Iran extended full support to the Afghan pushback against
the Soviet invasion in 1979. By Sir Farrukh Sultan

After the establishment of the Taliban government in most parts of Afghanistan in 1996, the relations
between the two countries further deteriorated that further led to a climate of mistrust. Though a peaceful
and stable Afghanistan was in both countries‟ interest, Pakistan was more inclined to support the
Pashtun groups of the Mujahedeen whereas Iran extended its help to the Northern Alliance
comprising other ethnic groups that held its sway over north-eastern Afghanistan. This support for the
opposing groups worsened relations between the two. As Tehran was not comfortable with the radical
Sunni Taliban regime, it felt insecure and perceived it as a serious threat to its national security,
consequently adopting a proactive policy towards Afghanistan. The murder of six Iranian diplomats and
some agents by the Taliban in August 1998 was a watershed as President Mohammad Khatami sought to
thaw relations between Iran and both the US and the Taliban.

Phase III - Since 2000

3. Bilateral Trade and Economic Cooperation

According to the International Monetary Fund, Pakistan is Iran’s 11th-largest trading partner. Since
the Islamic revolution in Iran in 1979, economic and trade relations between Pakistan and Iran have
remained marginal because of many reasons. It includes the lingering mistrust, the American
pressure, the complexity of the Afghanistan situation, the discord between the US and Iran concerning
Iran’s nuclear programmeme, and the Western economic sanctions against Iran which did not allow
Pakistan and Iran to take full advantage of the opportunities that became available after 9/11.

Pakistan and Iran signed a Preferential Trade Agreement (PTA) in Islamabad on March 4, 2004, –
which became operational on September 1st 2006. Under the PTA, both the countries agreed to reduce
customs duty on 647 tradable items. Pakistan will give duty concession on 338 items to Iran. In return,
Tehran will give duty concession on 309 items to Islamabad. Despite the signing of a preferential trade
agreement on the volume of trade between the two countries in subsequent years remained much lower
than its potential. As of April 2018, the volume of trade between Pakistan and Iran has reached the
mark of $1.5 billion per year and both countries want it to increase to a record level of $5bn.

4. IP Gas Pipeline
Progress on the IP gas pipeline has been inching forward since it was first conceived in the early 1990s
as the Iran-Pakistan-India pipeline. Finally, in March 2013, Pakistan and Iran officially inaugurated the
construction of the 780-kilometre pipeline from Iran to Pakistan in the Iranian border city of Chabahar. By
then Iran had completed most of its segment of the pipeline originating from the South Pars gas field.
Pakistan said it could not complete its section by the stipulated deadline of December 2014 due to
international sanctions on Iran, was approved by the U.S. Congress on October 1st 2008; other reasons
were linked to issues of the gas price and transit fees, and insecurity in Pakistani Baluchistan. The cost of
gas pipeline project up to Nawabshah is U.S. $ eight billion. If Pakistan fails to complete the project by the
end of 2014, it would have to pay the penalty of $ 3 million dollars per day. By Sir Farrukh Sultan

5. Import of Electricity from Iran

Import of electricity from Iran has also been on the cards. In 2002, Pakistan and Iran signed an
agreement for import of 74 MW of electricity from Iran. This project was postponed due to the sanctions
on banking transactions with Iran. Pakistan signed a Memorandum of Understanding (MoU) in 2012 to
import 1000 MW of electricity from Iran, and according to the National Electricity and Power Regulatory
Authority (NEPRA) of Pakistan imported 31.3GWh of electricity from Iran in December 2014. The
transmission of electricity was carried out through a 132KV transmission line from Iran to Pakistan. In
March 2015, Iranian company Tavanir and the National Transmission and Dispatch Company (NTDC)
approved the feasibility report on 1,000 MW electricity supply from Iran to Pakistan for which a 500 kV
Iran-Balochistan line will be laid at a cost of US$700 million. In August 2015, Iran also offered to export
3000 MW of electricity to Pakistan. By Sir Farrukh Sultan

6. CPEC vs Chabhar
While China is currently developing and operating Pakistan’s deep-sea port at Gwadar, the two
countries have
also agreed to construct the China-Pakistan Economic Corridor (CPEC) stretching from Gwadar to
Kashgar in
China. Besides the construction of a network of roads and railways, the option of laying a gas
pipeline along the corridor is also under consideration. The CPEC is expected to “place Gwadar on
the matrix of intense geo-strategic competition” (CPGS, 2014), with India looking to develop
Iran’s Chabahar port. In October 2014 Indian prime minister Narendra Modi’s cabinet decided to
develop the Chabahar port, which many believe is central to India’s plans to open up a route to
landlocked Afghanistan, where it has developed close security ties and economic interests, and
to gain access to energy-rich Central Asian states. However as of April 2018, Iran has also invited
Pakistan and China to make use of Chabhar port thus diluting Indian intension regarding Pakistan
etc.

7. Border Security and Counterterrorism

Iran has serious concerns over Iranian Sunni militant groups seeking protection in and operating
from Pakistan’s border areas. Iranian Baluchi insurgent groups, including Jundullah and its
breakaway factions JaishulAdl and Jaishul Nasr, are based in the Sistan-Baluchistan province of
Iran and have developed a substantial presence in the Pakistani-Iranian border belt of Pakistan’s
Baluchistan province (Mir, 2014).
Jundullah, a nationalist sectarian group, emerged in Iran’s Sistan-Baluchistan province in 2003
and launched an extensive campaign of violence mainly against Iranian security forces in
subsequent years. Iran executed
Jundullah’s founder leader, Abdul Malik Rigi, in June 2010. Some reports suggested that the
Pakistani authorities had handed him over to Iran. By Sir Farrukh Sultan

8. The Saudi Arabia Factor

A marked warming up of Pakistani-Saudi relations in the first quarter of 2014, which entailed
some high-level
bilateral visits and $1.5 billion in Saudi aid to Pakistan, was seen by some analysts as a critical
irritant in Pakistan’s relations with Iran. The changing power equilibrium in the Middle East in the
wake of the P5+1 group’s 7 diplomatic engagement with Iran on the latter’s nuclear programme;
the Syrian civil war; the rise of the Islamic State and mounting terrorist threats on Saudi borders
with Iraq and Yemen; and Pakistan’s close relations with Iran during the PPP-led government’s
term in office were the main factors that made Saudi Arabia feel insecure in the emerging
geostrategic environment in the region. Saudi efforts to strengthen ties with Pakistan mainly
entailed military or security and political objectives. During Crown Prince Salman bin Abdul Aziz
Al Saud’s February 2014 visit to Pakistan, the latter fully supported the former’s position on the
Syrian conflict and asked Syrian president Bashar al-Assad to form “a transitional governing
body” (Syed, 2014). There were also reports that Saudi Arabia was in talks with Pakistan to
provide arms, including anti-aircraft and anti-tank rockets, to Syrian rebels, a claim that Pakistan
denied (Dawn, 2014c). Pakistan also denied reports that it would send 100,000 Pakistani troops
to Saudi Arabia.

9. Afghanistan and India

Pakistan and Iran have vital stakes in peace and stability in Afghanistan. An insecure
and unstable Afghanistan after the drawdown of the International Security Assistance Force could
have serious implications for the internal security of the countries in the region – mainly Pakistan,
India and Iran, which have been competing in Afghanistan in terms of geopolitical, economic and
national security interests since the Soviet-Afghan war. While Pakistan and Saudi Arabia backed
the Taliban regime in Afghanistan in the 1990s, Iran and India supported the anti-Taliban
Northern Alliance. Later, when Pakistan became part of the U.S.-led alliance against the Afghan
Taliban, Pakistani relations with Iran started to improve.

In recent years there has been a growing convergence of trilateral interests among
Pakistan, Iran and Afghanistan, such as in the areas of counterterrorism, border security,
preventing drug trafficking, etc. Also, Iran’s grievances vis-à-vis Pakistan’s support for the Taliban
in the past have been addressed to a considerable extent in recent times. While Pakistan does
not support the Taliban’s return to power, it has also tried to reach out to non-Pashtun
communities in Afghanistan and has repeatedly said that it has no “favourites” there. By Sir
Farrukh Sultan

10. Recommendations
The important factor to build a relationship of friendship and tolerance is the unity of geography and the
continuing interaction between people who share a common religion, cultural heritage, history and
language. To further strengthen the historical ties, it is very important to understand each other's
fundamental interests. The vital factors that could promote shared perceptions and enhance cooperation
between these two states are:

 Pakistan should play the role of a bridge between Iran and the Middle Eastern countries. The two
countries need to have a comprehensive dialogue on how to help develop better understanding
on Afghanistan. That would help resolve internal and external problems of Afghanistan.

 Pakistan should separate its foreign policy from domestic policy for which the solution of the
 domestic political and security problems should be sought from within.

 Initiation of strategic dialogue between heads of concerned departments to address issues of

national security, territorial integrity, defence, and a focus on regional and international
challenges to both Iran and Pakistan is of paramount importance.

 Pakistan and Iran should make joint counter-terrorism team to counter the anti-Iran and anti-
Pakistan elements and secure their border.

 Iran has huge reserve of gas and Pakistan can overcome its energy needs through taking further
strengthening measures on IP Gas Pipeline agreement.

 A student exchange programme with Iran should start. People-to-people contacts need to be
promoted. Duo need to engage in expertise with each other and to establish close linkages.
There are hardly any persons in Iran and Pakistan who are experts on each other's country.

 Track II and Track III need to be established between Pakistan and Iran. By Sir Farrukh Sultan

10. Conclusion
Iran-Pakistan relations have not always been smooth; they have fluctuated over the years. Iran supported
Pakistan whenever it faced a serious crisis and was in danger. It extended moral, political, diplomatic, and
financial support to Pakistan. By Sir Farrukh Sultan
However, the events of 9/11, the growing US-Pakistan relations, and wars on Iran’s two flanks have had
their effect on the relations between the two states. The rise of the Taliban created a lot of acrimony
between the two. Despite some potential contentious issues, Iran-Pakistan relations remain close.

In the coming years the evolving socio-economic and political conditions in Iran and Pakistan would have
a considerable impact on their external policies. Social tensions are likely to continue in both the countries
owing to many reasons. The deepening cleavages based on ethnicity, language, religious sectarianism,
and economic disparities in Pakistan would have wider ramifications and hamper the performance of the
domestic political system as well as the pursuit of its external policies. Shia-Sunni sectarian clashes, in
particular, could have far-reaching impact on Iran-Pakistan relationship. More importantly, Iran’s growing
relations with India, particularly in defence, could affect Iran-Pakistan relations in the coming years.

The Pakistan-Iran bilateral relations make them important for the other regional powers, especially India.
Iran-Pakistan relationship political and economic will stand to improve only following the implementation
of better border management and enhanced security measures. Their individual strategic locations make
them important for the major powers as well for keeping their hold on the oil-rich region of Asia. Pakistan
and Iran seem to have concluded that a stable, independent, and economically strong Afghan state is
desirable to secure their own interests as well as peace and stability in the region.

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