Five things to know about Pakistan-Iran relationship

Diplomatic tensions between Pakistan and Iran have escalated after the two neighbours carried out military strikes inside each other’s territories.

Pakistan launched a precision attack against Baloch separatists in Iran early on Thursday after an Iranian missile strike on the Jaish al Adl (Army of Justice), a terror group, in Pakistan’s Balochistan province.

Despite the ongoing crisis, the two countries have a long-standing relationship. Here are five key points, which have shaped diplomatic ties over the years.

Militancy

Tensions escalated significantly between Islamabad and Tehran in April 2017 when Jaish al Adl members killed 10 Iranian border guards and then escaped across the border to the Pakistani side.

At the time, Major General Mohammad Bagheri, the chief of the general staff of the Iranian Armed Forces, urged Pakistan to confront the group, cautioning that if it failed to do so, Tehran possessed the capability to target militant "safe-havens, wherever they are".

In 2022, Pakistani Baloch insurgents, who are seeking independence from Islamabad, attacked a checkpoint in the Kech district of Balochistan province, killing 10 Pakistani soldiers.

Pakistan accused Iran of supporting the attack and warned that "if there are more attacks, we will take decisive action".

Diverse geopolitical interests

The diverse nature of geopolitics further complicates the dynamics between Pakistan and Iran.

Iran has backed Shia groups including the Houthis in Yemen and Hezbollah in Lebanon, which have occasionally targeted the United States and its allies in the Middle East.

The Houthis engaged in a years-long conflict with a coalition led by Saudi Arabia. On the other hand, Saudi Arabia and Pakistan have maintained close ties, with Riyadh providing significant financial support to help Islamabad address current account challenges.

Economy

Despite the ups and downs in their relations, the two countries enjoy close trade ties. The border towns in Pakistan are flooded with Iranian goods ranging from petrol, shampoos to yogurt brands.

In 2020, Iran's exports to Pakistan had reached $352 million, making it the third largest export destination for Iranian goods. According to Iranian customs data, in the first half of 2022, Iranian exports to Pakistan totalled $321 million, with imports from Pakistan reaching $110 million.

Last year, the two countries signed an agreement to boost their bilateral trade to $5 billion in coming years.

In 2017, the central banks of both nations signed a banking and payment agreement, cementing financial cooperation and relaxing credit requirements.

Gas pipeline

For years, a cross-border gas pipeline project has scarred the relations. The Iran-Pakistan gas pipeline was conceived in the 1990s. Iran was supposed to export gas to meet Pakistan's burgeoning energy needs.

The proposed pipeline spans over 2,700 kilometers with 1,100 km-long half falling inside the Iranian territory. If it becomes operational, the project, which has capacity to carry 150 million cubic meters of gas, can greatly ease Pakistan’s energy crisis.

But the project has been bogged down due to the US sanctions on Iran. Islamabad is wary of pursuing it since such a move could invite financial sanctions on Pakistani companies.

Afghanistan

Both countries share a border with Afghanistan where the Taliban have been in power since August, 2021.

Iran has argued with the Taliban over the use of shared water resources whereas Pakistan accuses the Taliban of not doing enough to stop cross-border terrorism.