In a bold move to deepen economic ties, Pakistan has reserved 1,000 acres of prime industrial land in Karachi exclusively for Turkish companies, signaling a new chapter in the long-standing friendship between the two nations. The generous offer, which includes free land for an Export Processing Zone (EPZ), comes as both countries work toward a ambitious $5 billion bilateral trade target.
The proposal first took shape during Prime Minister Shehbaz Sharif’s meeting with Turkish President Recep Tayyip Erdogan last April. Since then, a high-powered Pakistani delegation has been busy making the case for why Turkish manufacturers should set up shop in Karachi. Their pitch is compelling: companies that relocate could see their freight costs plummet from $4,000 to just $1,000 per ton when exporting to regional markets.
Strategic Location, Real Savings
Karachi’s geographic position gives it a natural advantage for reaching markets across the Middle East and Central Asia. Pakistani officials have been highlighting how the city’s developed infrastructure and port facilities can help Turkish businesses slash their operational costs while expanding their regional footprint.
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The Pakistani team recently visited established EPZs in Turkiye to study their successful model. Turkish zones have evolved significantly since the first one opened in the 1960s, now offering attractive packages including 20-year tax breaks and reliable utilities. Pakistan hopes to replicate this winning formula in Karachi.
Trade Between Brothers Grows Stronger
The economic relationship between the two nations has been gaining steady momentum. Two-way trade hit a record $1.4 billion last year, jumping nearly 30% from the previous year. Pakistan mainly sells cotton, fabrics, and garments to Turkiye, while importing machinery, plastics, and chemicals in return.
The proposed EPZ is seen as a potential game-changer that could take this partnership to the next level. Turkish companies establishing manufacturing units in Karachi would not only benefit from lower costs but also gain better access to growing markets in the region.
Saudi Partners Join the Party
In another significant development, a high-level Saudi business delegation is scheduled to arrive in Pakistan next month. The 15-member team, which includes senior royal family members, represents one of the most substantial Gulf business missions to visit Pakistan in recent years.
The Saudi investors will explore opportunities across multiple sectors including mining, energy, information technology, and food processing. Their visit builds on previous engagements and reflects a strategic shift toward strengthening business-to-business connections alongside government-level cooperation.
Despite warm diplomatic relations, Pakistan faces a substantial trade gap with Saudi Arabia, importing significantly more than it exports. However, recent initiatives have started to narrow this imbalance, with Pakistani exports to the Kingdom growing by 22% to reach $700 million.
Looking Ahead
As Pakistan positions itself as an emerging investment destination, both the Turkish EPZ initiative and the Saudi business mission represent crucial steps toward economic revitalization. For Turkish companies, the Karachi EPZ offers a strategic foothold in South Asia. For Saudi investors, Pakistan presents diverse opportunities beyond traditional sectors.
With the Gulf Cooperation Council Free Trade Agreement in the works and both Turkiye and Saudi Arabia showing increased interest, Pakistan’s economic landscape appears poised for meaningful transformation in the coming years.
Frequently Asked Questions (FAQs)
1. What has Pakistan offered Turkiye to boost economic cooperation?
Pakistan has allocated 1,000 acres of land in Karachi’s Industrial Park for Turkiye to establish a dedicated Export Processing Zone, with the land provided free of cost.
2. How can Turkish companies benefit from this Export Processing Zone?
Turkish companies relocating to the Karachi EPZ could reduce their freight costs from $4,000 to just $1,000 per ton for exports to regional markets, thanks to Karachi’s strategic location and infrastructure.
3. What is the current trade volume between Pakistan and Turkiye?
Bilateral trade reached a record $1.4 billion in 2024, showing nearly 30% growth from the previous year. Both countries are now targeting $5 billion in trade volume.
4. What other international economic partnership is Pakistan developing?
Pakistan is hosting a high-level 15-member Saudi business delegation that will explore investment opportunities in mining, energy, IT, agriculture, and other sectors.
5. How is Pakistan addressing its trade imbalance with Saudi Arabia?
Through various initiatives, Pakistan has increased its exports to Saudi Arabia by 22%, bringing total trade volume to $700 million and beginning to reduce the trade deficit.
