In a landmark step that could reshape regional trade and connectivity, Pakistan and Türkiye recently announced the establishment of a special economic zone (SEZ) in Karachi exclusively for Turkish entrepreneurs. Planned in Pakistan’s commercial capital and main port city, the SEZ can serve as a dedicated hub for Turkish companies in various sectors, including manufacturing, construction, technology and services. More than just a business enclave, it symbolizes Türkiye’s growing economic presence in South Asia and, at the same time, offers Pakistan a timely opportunity to attract foreign direct investment and industrial expertise amid its ongoing economic recovery phase. Unveiled during Foreign Minister Hakan Fidan’s official visit to Islamabad on July 9, alongside several other new initiatives, this growing economic dimension of the Pak-Turk partnership has the potential to transform their historical friendship into a vision for shared prosperity.
Addressing a joint presser along with Pakistan’s Deputy Prime Minister Ishaq Dar, Fidan hailed the new deal as “an unprecedented move in the history of Turkish-Pakistani energy collaboration.”
Signed in April 2025, an agreement between the Turkish Petroleum Corporation (TPAO) and Pakistan’s national energy firms, Mari Energies, OGDCL and PPL, paves the way for joint offshore oil and gas exploration off Pakistan’s coast, especially near Karachi, an area believed to hold large untapped reserves.
For the first time, Turkish firms will engage in such ventures in Pakistan, and it could not only be a game-changer for Pakistan’s energy security but also a valuable addition to Türkiye’s growing portfolio of overseas resource projects – from Somalia to the Eastern Mediterranean.
Noting the alignment of this step with Türkiye’s global strategy to expand resource exploration, Fidan said that the deal was one of the outcomes of the “more institutionalized approach” adopted by both countries.
Meanwhile, Dar announced the resumption of the Istanbul-Tehran-Islamabad (ITI) train project, stating that delegations from both countries would soon meet to “finalize the road map.” Additionally, a newly established joint committee on security, defense and intelligence will convene on July 24 in Islamabad.
Along with the revival of the ITI rail corridor for boosting trade, cooperation in ship-breaking and water management is also underway. The Karachi SEZ is only one part of a much broader economic transformation being pursued jointly by Türkiye and Pakistan. Turkish companies are now entering strategic sectors of the Pakistani economy, including energy, infrastructure and privatization.
In recent years, bilateral trade has steadily grown, reaching approximately $1 billion (TL 40 billion) by 2024. With the SEZ and other economic ventures now in motion, both governments have expressed a clear ambition to scale this up to $5 billion, a goal supported by regular high-level exchanges and a growing number of joint agreements
Currently, Turkish investments in Pakistan are valued at around $2 billion, and Turkish construction firms have completed projects worth $3.5 billion. Turkish firms are also being considered for infrastructure projects, such as the Jinnah Medical Complex and Daanish University, as well as for participation in the privatization of Pakistan’s power distribution companies (Discos) – a sector in urgent need of reform.
Twelve joint standing committees handle coordination across these initiatives under the High-Level Strategic Cooperation Council framework. A new joint ministerial commission, co-chaired by Pakistani Commerce Minister Jam Kamal Khan and Defense Minister Yasar Guler, is expected to meet soon to ensure swift implementation.
Deeply rooted in shared history, culture and mutual respect, Pak-Turk ties have often been described as a “strategic brotherhood.” Since Pakistan’s independence in 1947, Türkiye has stood by it as a steadfast ally, offering consistent support on the Kashmir dispute and finding reciprocal backing from Islamabad on issues such as Cyprus and counterterrorism.
These ties have been institutionalized through the High-Level Strategic Cooperation Council, established in 2009, which provides a structured platform for expanding cooperation across defense, energy, education and trade.
President Recep Tayyip Erdoğan’s visits to Pakistan and Prime Minister Shahbaz Sharif’s engagements with Türkiye at multilateral forums have kept bilateral relations dynamic. Most recently, meetings at the Economic Cooperation Organization (ECO) summit in Azerbaijan reiterated both sides’ commitment to regional collaboration and connectivity.
For Pakistan, Türkiye is emerging as a valuable alternative partner, one that brings not only capital and technology but also political support on key international platforms. At a time when Islamabad seeks to reduce over-reliance on a handful of allies, Turkish investments offer much-needed diversification and resilience.
Meanwhile, for Türkiye, investing in Pakistan means gaining access to a large market of over 240 million people, rich in natural resources and strategically located at the crossroads of South Asia, Central Asia and the Middle East. Not only that, but it can also be an opportunity to enhance its influence across the Muslim world through development partnerships, trade corridors and shared infrastructure.
Eventually, the resumption of the ITI rail route could position Türkiye as a critical link between Europe and South Asia, allowing Turkish goods and services to flow more efficiently across the continent. This is especially important as global trade is in a process of re-alignment amid drastic geopolitical shifts and supply chain disruptions. However, this deepening partnership is not without challenges.
At times, Türkiye’s close alignment with Pakistan has drawn the ire of India, and even after the four-day war in May between India and Pakistan, New Delhi has responded with trade curbs, cancellation of aviation contracts and diplomatic rebukes. Balancing relationships in a tense regional environment will require diplomatic skill and expertise.
Additionally, internal economic instability and political fluctuations in Pakistan can hinder implementation if not carefully managed.
Despite these complexities, the momentum behind Türkiye-Pakistan cooperation is undeniable. The Karachi SEZ, offshore energy collaboration and participation in large-scale public projects reflect a shared determination to move beyond rhetoric toward results.
During his visit, Fidan also said that defense cooperation would be further strengthened in the days to come. Calling it a “strategic step,” he said it was crucial for the security of Pakistan and Türkiye.
As both nations look ahead to the 8th High-Level Strategic Cooperation Council meeting in 2026, their partnership stands as a model for how strategic cooperation between Muslim-majority countries can evolve into a meaningful force for economic progress and regional stability.
In an era of shifting alliances and uncertain global trends, the Türkiye-Pakistan partnership has the potential to reshape the economic and strategic dynamics in the region.
