The long-awaited restart (expected to be operational from 31st December 2025) of the Istanbul–Tehran–Islamabad (ITI) freight train marks a pivotal moment for Pakistan’s regional connectivity.

This corridor — linking South Asia, the Middle East, and Europe — has the potential to reshape Pakistan’s trade landscape, reduce logistics costs, and open direct access to European markets.

Yet, despite this potential, policy and banking barriers continue to hold back progress.

The Hidden Obstacle: Financial Isolation

While the State Bank of Pakistan (SBP) has issued clear circulars — such as FE Circular No. 04 of 2017 outlining trade mechanisms with Iran — commercial banks still avoid issuing Financial Instruments (FIs) for Iran-related transactions.

Why?
Because of over-compliance and fear of secondary sanctions — even though U.S. OFAC rules do not prohibit trade with Iran for entities not on the sanctions list.

Despite banking restrictions, hundreds of trucks continue to cross daily through Taftan and Quetta Customs, moving goods between Pakistan and Iran. However, the lack of effective customs oversight means Pakistan loses valuable trade data, tax revenue, and policy control.

This over-cautious approach has paralyzed legal trade and punished genuine businesses that want to use Iran for transit to Turkey and Europe.

What Needs to Change

1️⃣ Operationalize Existing SBP Mechanisms
SBP’s framework for Iran trade already exists — it just needs implementation through designated banks under monitored compliance.

2️⃣ Banking Reform for Non-Sanctioned Trade
Commercial banks must differentiate between sanctioned and non-sanctioned entities. Legal trade should not be blocked under blanket fear.

The Economic Payoff

This corridor could:

• Cut transit time from 21 days (by sea) to 11 days (by rail)
• Reduce freight costs by up to 30%
• Expand export access to Central Asia and Eastern Europe

For a nation facing high logistics costs and limited export diversification, unlocking the Pakistan–Iran–Turkey Rail Corridor isn’t just a trade initiative — it’s an economic revival strategy.

Muhammad Anwar, CMILT
Chief Executive, Custom Syndicate (International Logistics Solution Providers)
📧 anwar@nstn.pk | 📞 ‪+92 321 9443144‬