Pakistan and Iran have agreed to enhance economic ties and open two more border crossings to increase trade during a visit by Iranian President Hassan Rohani to Islamabad.
Rohani held talks with Pakistani Prime Minister Nawaz Sharif shortly after arriving in the Pakistani capital on March 25.
After the talks, Sharif and Rohani observed the signing of six agreements related to trade and economics, including a Five-Year Strategic Trade Cooperation Plan.
"Our trade and economic ties have suffered due to sanctions. We have agreed to strengthen our bilateral ties in diverse areas of trade, economy and energy," a statement quoted Sharif as saying after the talks.
Rohani is accompanied by eight cabinet ministers, including those responsible for oil, electricity, and industries, during his two-day trip to Pakistan -- the first by an Iranian head of state in 14 years.
The Pakistani Foreign Ministry said a long-delayed gas pipeline to supply Iranian natural gas to energy-starved Pakistan would figure high during the talks.
Rohani said they also discussed ways to boost bilateral trade and to move forward a free-trade agreement between Pakistan and Iran.
He added that the two sides also explored the possibility of sea trade between Pakistan's Gwadar Port and Iran's Chahbahar Port.
Rohani’s visit is taking place after international economic sanctions imposed on Iran over its nuclear program were lifted in January.
The restrictions had made it difficult to find financial backing for the 800 kilometers of pipeline needed on the Pakistani side.
Also, Washington has for years opposed the multibillion-dollar project amid concerns over Tehran's nuclear ambitions.
Pakistan is reportedly seeking to boost electricity imports from Iran to as much as 3,000 megawatts from some 75 megawatts currently.
Iranian officials were quoted as saying tensions between Iran and regional rival Saudi Arabia, and Pakistan's possible role as mediator, would also be discussed during Rohani’s visit.
The Iranian president will hold talks with both President Mamnoon Hussain on March 26. He is also scheduled to address a gathering of Pakistani scholars and intellectuals.
On the eve of his visit, Rohani said that "constructive relations with neighbors and the Islamic world are at the priority list of our foreign policy."
"I believe that at this crucial moment of the history of relations between the two countries, it is essential that Pakistan and Iran...lay the cornerstone of a new bilateral engagement based on the mutual interests of the two countries," he also said in his statement.
Pakistan has traditionally had close relations with the United States and Sunni-ruled Saudi Arabia, Shi’ite Iran's top rival.
Meanwhile, relations between Pakistan and Iran have often been fraught.
In the 1980s, Islamabad and Tehran backed different groups fighting against Soviet forces in Afghanistan.
Pakistan, which has more Shi’ite Muslims than any country apart from Iran, later backed the hard-line Sunni Taliban movement in Afghanistan.
Tehran also accused Al-Qaeda-linked militants in Pakistan of orchestrating deadly attacks on Iranian soil.
But Islamabad’s refusal last year to join a Saudi-led offensive against Shi’ite Huthi rebels in Yemen has helped rebalance the relationship with Iran.
In January, Pakistani officials used shuttle diplomacy in an attempt to ease heightened tensions between Iran and Saudi Arabia.
Pakistan agreed this year to join an international military coalition led by Saudi Arabia to fight terrorism in the Muslim world, but it did not commit troops for the alliance. Iran and its regional ally Syria are not part of the initiative.