Iran-Pakistan Relations: Strategic Transition from Geopolitics to Geo-Economics

Abstract

Pakistan and Iran share a long-standing relationship shaped by historical, cultural and religious ties. However, their bilateral relations have been influenced by complex geopolitical and geo-economic dynamics. This study examines the shift from geopolitics to geo-economics in Pakistan-Iran relations post-2008, assessing its key impacts and underlying challenges. Utilizing a neoliberal framework, the research explores how economic interdependence, trade and investment have redefined their diplomatic engagement. The study highlights the strategic significance of economic cooperation between the two nations, particularly in energy trade, border markets and joint infrastructure projects. The Iran-Pakistan gas pipeline remains a crucial yet contentious issue due to U.S. sanctions and financial constraints. Despite external pressures, economic diplomacy has emerged as a dominant feature in their bilateral engagement, with trade volume exceeding $2 billion in 2022 and plans to expand further. The research also identifies constraints such as regional rivalries, security concerns and political mistrust that hinder deeper collaboration. By analyzing Pakistan-Iran relations particularly with regards to geo-economics, this study underscores the potential for economic integration to enhance regional stability. It suggests that pragmatic economic policies, supported by multilateral cooperation, can help both nations overcome geopolitical barriers and foster a sustainable partnership.