Iranian President Masoud Pezeshkian recently visited Pakistan and met Pakistan’s Prime Minister Shehbaz Sharif and President Asif Ali Zardari. During the meeting, both leaders discussed bilateral and regional issues and signed several agreements to deepen bilateral cooperation. The visit comes at a crucial time as relations between the two countries have been strained in recent years due to recurring border tensions and longstanding concerns over cross-border militancy.
Both countries pledged to boost bilateral trade to $10 billion and revive key energy and connectivity projects. Pezeshkian attended the Pakistan-Iran Business Conference in Islamabad, during which a draft of the free trade agreement was finalized and the plans for the next Joint Economic Commission in Tehran and new border infrastructure initiatives like the Chadgi–Kouhak crossing were discussed. Iran and Pakistan also reached a preliminary agreement to establish a joint free trade zone at the Rimdan-Gabd border. Twelve memorandums of understanding were signed in various sectors, including agriculture, science, trade, technology and innovation, information and communications and maritime security. During the meeting between Sharif and Pezeshkian on the sidelines of the ECO summit held in Azerbaijan earlier this year, they had reviewed previous agreements and reiterated the importance of strengthening trade and diplomatic ties. The continuous attempts to engage bilaterally as well as through multilateral platforms reflect both countries’ determination to maintain momentum in their relationship and advance shared economic and security objectives amid regional challenges.
Perhaps the most important aspect of the visit was concerning regional and border security. Iran and Pakistan share a 900-kilometer porous border through Balochistan, a region plagued by decades of separatist insurgency. Militant groups like Iran-based Jaish al-Adl and Pakistan-based Balochistan Liberation Army (BLA) have carried out numerous attacks, and both countries have accused each other of harboring separatist groups. In January 2024, Iran launched airstrikes in Pakistan’s Balochistan, claiming to target militants, prompting retaliatory strikes by Pakistan. These sporadic escalations reflect deep-rooted unrest and mistrust and have been a major reason for tensions between the two countries. The late Iranian President Ebrahim Raisi had pledged to improve relations between the two countries; however, his tenure was marked by several flashpoints, particularly in Sistan and Balochistan. Ever since Pezeshkian came to power, he has emphasized the need to improve Iran–Pakistan relations.
Apart from lingering security concerns, cross-border smuggling and narcotic crimes have also been a concern for both countries, and Islamabad and Tehran have shared interests in addressing these challenges. Recent attempts to crack down on smuggling have sparked local resentment, mainly because of limited economic opportunities for locals in the formal sectors. The Pakistan government has often cited concerns over smuggled Iranian petrol. Last year, Pakistan’s oil industry warned that nearly 4,000 tons of Iranian petroleum products were smuggled to the country daily, which adversely affects the legal supply chain, causing a severe economic loss. Industry bodies had then demanded urgent government action, citing falling sales and damage to businesses. US sanctions on Iran hinder formal trade with Pakistan, stalling energy projects and trade.
One of the most persistent hurdles between the two countries has been energy cooperation. During the recent meeting, both countries discussed ways to revive the Iran-Pakistan pipeline project that was agreed upon in 2009. While Iran had completed and inaugurated its 900-kilometer stretch in 2013, Pakistan faces challenges due to US sanctions that had postponed and delayed its side of the project. In 2014, Islamabad requested a 10-year deadline extension to avoid penalties. However, as the extended deadline approached in early 2024, Iran threatened to take the matter to international arbitration, potentially seeking $18 billion in damages. In response, Pakistan approved the construction of the first 80-kilometer phase from the Iranian border to Gwadar in March 2024. Despite converging interests, Pakistan is unlikely to take immediate steps to accelerate energy ties until the US sanctions are lifted. It remains to be seen how energy projects can be resumed amid sanctions.
In the current geopolitical context, Pakistan exhibits a complex balancing act by managing and improving ties with the United States, while continuing the deep economic and strategic cooperation with China and exploring wider areas of cooperation with Tehran. Iran recognizes Pakistan’s potential in any future indirect or backchannel talks with the United States, as recently acknowledged by US Secretary of State Marco Rubio, who welcomed Islamabad’s willingness to mediate between Washington and Tehran. Moreover, President Donald Trump’s hosting of the Pakistan Army Chief Asim Munir for a private luncheon earlier in June underscores the pragmatic and opportunistic reset in bilateral ties between the United States and Pakistan. Tehran recognizes the position Pakistan holds in US foreign policy calculus in the current geopolitical environment, especially as the Trump administration reengages with Pakistan through a transactional approach.
For Iran, security engagement with Pakistan is particularly significant at this juncture, as Tehran remains cautious about the possibility of the United States leveraging Pakistan in the event of future conflict or escalation with Iran. Tehran seeks assurances from Islamabad while also aiming to strengthen bilateral security cooperation. Also, Iran wants to avoid diverting additional resources and attention to managing persistent border tensions, which carry the risk of spiraling out of control. Given its strategic constraints, Tehran wants to establish a clear mutual understanding with Pakistan to ensure stable borders and prevent adversaries from exploiting them as a pressure point. The meeting between Iranian and Pakistani military chiefs earlier in May was focused on enhancing border security and stability. In the current circumstances, it will be highly detrimental to Iranian interests if the tensions escalate along the borders.
Despite past mistrust, Pakistan’s military capabilities remain a key incentive for Iran to deepen engagement, especially in light of the limitations in its forward defense doctrine which was exposed during the war with Israel and the setbacks faced by its proxies. For Tehran, having a capable defense partner in proximity is strategically valuable, especially in light of shared challenges.
Amid a weakened economy and the limitations due to sanctions, Iran has a strong interest in expanding economic engagement with Pakistan. As an immediate neighbor, Pakistan offers both geographical proximity and strategic access. Through the China-Pakistan Economic Corridor (CPEC), Islamabad can provide Iran with connectivity to Chinese-led infrastructure networks, which will be an opportunity that aligns closely with Tehran’s objective of mitigating its isolation and integrating into broader regional trade and transit corridors. This is especially important as China remains the largest trading partner for both Iran and Pakistan. Iran’s participation in the CPEC could enable a China–Pakistan–Iran trade and energy corridor, enhancing regional connectivity. Leveraging Pakistan’s BRI-built infrastructure and Gwadar Port, both sides could boost exports and cut transport costs. Despite various hurdles and limitations, both countries are working to improve ties, driven by a convergence of interests that may outweigh historical differences and pave the way for deeper security cooperation amid shifting regional power dynamics. As both countries understand the limitations in expanding economic ties in the current context, they are prioritizing broader security and regional stability as the foundation for future cooperation.
