A new land bridge between Pakistani ports and Iran may provide a lifeline to Tehran while it is under US blockade and redraw key Asian trade routes.
An order issued by Pakistan’s Ministry of Commerce designates six transit routes through the country's south-west, connecting Gwadar, Karachi and nearby Port Qasim to the Iranian border crossings at Gabd and Taftan.
Two Pakistani sources – a government official and a diplomat – told The National that Washington was not consulted on Islamabad’s decision.
It is unclear, however, whether Pakistan’s army, which is leading Islamabad’s mediation efforts between the US and Iran, may have discussed the land bridge with Washington privately. A spokesman for the Pakistani military contacted by The National said the military does not comment on trade policy.
The Ministry of Commerce's two-page directive issued on April 25, four days after an expected second round of US-Iran peace talks in Islamabad failed to take place, could reshape the economic dimensions of the war. The statutory regulatory order (SRO), titled the “Transit of Goods through Territory of Pakistan Order 2026”, allows for the movement of “third-country cargo” through Pakistani ports and overland corridors into Iran. The order came into force immediately.
The SRO activates a bilateral road transport agreement signed with Tehran in 2008 but never used until now. That it is materialising amid the US-Iran war is difficult to read as coincidental. The US Navy launched a blockade on April 13 targeting all ships seeking to reach Iranian ports. More than 3,000 Iran-bound containers have been stranded at Karachi as a result.
The order creates a formalised overland bypass around the naval blockade – a land bridge that could allow Iran’s export partners, such as China, to send goods to the Iranian market via Pakistan without paying Pakistani import duties.
The Pakistani diplomat, who has direct knowledge of Iran policy and spoke on condition of anonymity, suggested a link between the US-Iran war and the timing of the SRO. Until recently, the diplomat said, Iran had been resisting discussions to open new overland trade routes with Pakistan. Although Iran never made its reasons explicit, Pakistani officials believe it was because Tehran wanted to shield Chabahar, an Iranian port project jointly developed with India, from competition with the Pakistani port of Gwadar, a Pakistan-China joint project less than 200km away.
The US blockade on Iranian ports, including Chabahar, however, appears to have changed Iran’s calculus. After the war began, Iranian officials approached their Pakistani counterparts to restart talks on opening the land bridge.
India began working with Iran on Chabahar more than 20 years ago, with a plan to use the port to bypass Pakistan as a route for Indian trade to Iran, Afghanistan and Central Asia. The project’s fortunes have been affected by more than the current US blockade. Indian investment in the port project had benefited from a US sanctions waiver that was revoked by the Trump administration in September last year. At New Delhi's request, Washington issued a six-month conditional waiver that expired on April 26, the day after Pakistan’s SRO was issued. India’s External Affairs Ministry says the matter is “under active discussion” with Washington, but thus far no waiver extension has been issued. On April 25, Iran’s state-affiliated Tasnim News Agency reported that India was “weighing the transfer of its Chabahar port operations to an Iranian firm”.
The Pakistani diplomat told The National that the new land bridge is unlikely, in practical terms, to undermine the US blockade. This, they suggested, is probably why the US has not objected thus far. The 3,000 stranded containers in Karachi have not yet moved, nearly a week since the order came into force. “They’re still sitting there,” the diplomat said.
Meetings between Islamabad and Tehran to greenlight the movement of the containers have been postponed repeatedly, suggesting that the bureaucracy and practicalities involved in utilising the land bridge to get third-country goods into Iran are complex.
Nonetheless, the diplomat conceded, there is a risk that Pakistan could increase its exposure to US sanctions against Iranian trade. The current sanctions regime allows for non-US entities to export most consumer and industrial goods to Iran, provided the end users are not Iranian entities designated by the US government.
But handling third-country cargo bound for Iran without thorough checks on what is being shipped and to whom could have implications for Pakistan’s government and banking system. Pakistan’s compliance costs could grow without Islamabad seeing any revenue from import duties.
The SRO requires exporters to Iran to provide an “encashable bank guarantee” equivalent to Pakistan’s import levies – a safeguard to ensure that Iran-bound goods are not diverted into the Pakistani market. If such deposits were found to be linked to sanctioned cargo and held by Pakistani banks, those banks could be cut off from US correspondent banking services.
What constitutes a sanctions violation is also open to interpretation by US authorities. Washington could decide at any time to interpret Pakistan’s land bridge as facilitating illicit Iranian trade.
Asked whether Pakistan had considered such risks, the diplomat said Islamabad has been mindful of punitive measures from Washington over its trade with Iran for years, particularly after the White House announced in February that all countries trading with Iran would be subject to tariffs.
So far, however, the US has not applied such tariffs to Pakistan – a decision one Pakistani source speculated could be thanks to President Donald Trump’s fondness for Pakistan’s leaders.
Because of the lack of US action on Pakistan-Iran trade up to this point, the Pakistani diplomat said, Islamabad “hadn’t thought much” about any US action over the opening of the land bridge. Pakistan’s overriding interest, they said, is its export survival and resolving its bilateral trade blockages with Iran.
From Islamabad’s perspective, third-country exports to Iran are a small part of the decision to open the new routes; Pakistan intends for them to facilitate the movement of its own exports to the Iranian market and to Central Asia. Pakistan has been largely cut off from Central Asian trade since it went to war with Afghanistan earlier this year and all but shut its northern border. The border with India is also largely closed due to long-standing geopolitical tensions between Islamabad and New Delhi. Iran, therefore, is the only significant overland trade route Pakistan has left.
“If Afghanistan’s border is closed and if Iran also closes their border because of the war – then our exports to the Central Asian states and Russia are completely closed down,” the diplomat said. “There’s no option other than air freight, and the cost of that is beyond what our exporters would be able to bear.”
