Pakistan and Iran have signed agreements across various sectors, pledging to raise bilateral trade to $10bn and committing to work more closely to eliminate the menace of “terrorism” in favour of peace and prosperity in the region.

This came as both nations have recently been embroiled in conflicts with their respective regional foes.

Sunday’s agreements across various sectors, including energy and trade, were signed during the two-day visit of Iranian President, Masoud Pezeshkian.

Along with a high-level delegation, including Foreign and Defence Ministers, Pezeshkian arrived on a two-day visit to Pakistan on Saturday, August 2, 2025.

Addressing a joint press briefing, Pakistan’s Prime Minister, Shehbaz Sharif said, “We have set a target of $10bn in trade and hope to achieve it as soon as possible.”

Sharif reiterated that Pakistan’s stance of supporting Iran’s right to a nuclear programme for peaceful purposes under the United Nations charter and condemned Israel’s aggression against Iran, saying that there was “no justification” for the 12-day June conflict in which the United States militarily intervened on Israel’s behalf.

He said that the two countries would take effective steps to eliminate “terrorism” and open the avenues of prosperity in the region.

Pakistan and regional rival India were on the cusp of their fifth all-out war earlier this year before a ceasefire ended several days of heavy and deadly aerial exchanges.

On his part, the Iranian President said that his deep belief is that “we can easily, in a short time, increase the volume of our trade relations from the current $3bn to the projected goal of $10bn.”

He thanked the government and people supporting Iran “during the 12-day terrorist aggression by the Zionist regime and the United States.”

Pezeshkian called for better border management and cooperation around the mutual border to counter security threats.

In return, Sharif said that Islamabad and Tehran have a common stand against “terrorism”, and no such activity would be allowed in Pakistan or Iran. “We have to protect our borders and take strict steps against terrorism to open the roads to peace and development in the region,” said Sharif.

Relations between Pakistan and Iran have often been shaky, especially over cross-border tensions that escalated in January 2024 when both sides launched tit-for-tat missile strikes.

Despite the strains, the two countries have kept the diplomatic door open. In May, the Iranian foreign minister visited Pakistan amid rising tensions with India.

During the Iran-Israel conflict, Pakistan supported Iran’s right to self-defence and condemned the US attacks on Iran’s nuclear facilities.

The leaders of Pakistan and Iran also called for an immediate ceasefire in Gaza and an end to Israel’s attacks in the enclave.

The two sides also inked a string of memorandums of understanding in the fields of information technology, law and justice, climate change, and tourism.

According to a reporter, Pakistan and Iran have agreed to cooperate in order to ensure violence is prevented on either side. “They agreed to have more border management between the two countries,” he said.

He added that the sides also discussed Pakistan acting as an intermediary between Washington and Tehran, among other countries trying to ease tensions between archenemies.

Creation Of Trade Route Between Pakistan And Europe Likely

Meanwhile, Analyst Ammar Habib Khan of the Institute of Business Administration told a news agency that Pakistan’s normalising relations with Iran might lead to the creation of a trade route between Pakistan and Europe.

He added that it would be an “efficient and logistically sound route.”

The Analyst also stated that the informal trade between Iran and Pakistan is likely to increase more than the formal trade target shared by the countries.

He noted that discussions have been held on how to formalise the “informal trade that is already happening, whether it is oil, gas or something else.”