TEHRAN - Iran is pursuing a proposal to establish a joint free trade and industrial zone with Afghanistan and China, an Iranian provincial official said on Sunday, as Tehran seeks to expand regional economic cooperation, attract foreign investment and strengthen trade links.
Morteza Zakarian, director-general of economic and financial affairs for South Khorasan province, said administrative procedures for the proposed zone were underway, citing the three countries’ geographic, economic and transit potential.
Zakarian said the proposal was first presented to Iran’s president by the governor of South Khorasan in December last year. The plan aims to expand economic cooperation through private-sector investment, particularly from Chinese companies, he said.
Under the proposal, Iran would provide infrastructure, labor and industrial capacity, while China would contribute investment, financing and technology. Afghanistan would bring its mineral resources, including rare-earth deposits, as well as its strategic location along regional transit routes, according to Zakarian.
He described the potential Iran-Afghanistan-China corridor as a “secure, alternative and sustainable” route for expanding economic relations amid changing regional and international conditions.
Mojtaba Shariatifar, South Khorasan’s deputy governor for economic affairs, said the proposal was discussed during a meeting with a visiting Chinese economic delegation and received a positive response from the Chinese side.
He said the initiative would be pursued through China’s embassy and government, while potential cooperation agreements could be signed during a future visit by China’s ambassador to the province.
The proposed project could offer the three countries an opportunity to deepen economic ties by combining Iran’s industrial and infrastructure capacity, China’s financial resources and technological expertise, and Afghanistan’s mineral wealth and geographic position between Central and South Asia.
China has expanded its economic engagement with Afghanistan in recent years, particularly in the mining sector, while Iran has sought to strengthen its position as a key trade and transit hub connecting Afghanistan with regional and international markets.
The initiative also comes as recurring political and security tensions between Afghanistan and Pakistan have disrupted bilateral trade and transport. Border closures and restrictions have periodically affected the movement of Afghan exports and imports, increasing pressure on Kabul to diversify its trade routes.
Iran has increasingly positioned itself as an alternative route for Afghanistan trade, with the Chabahar Port providing Afghan businesses with access to international markets without relying exclusively on Pakistani transit routes. India has also been involved in the development of Chabahar, which has been promoted as an important link between India, Iran and Afghanistan.
For Afghanistan, deeper economic cooperation with Iran and China could provide opportunities to attract investment into mining, infrastructure and transit while reducing reliance on a limited number of trade corridors. However, developing such a large-scale regional project would require substantial investment and close coordination among the three countries.
The proposed free trade and industrial zone remains at the planning stage, and its implementation would depend on further negotiations among Iran, Afghanistan and China, including agreements on investment, infrastructure, customs procedures, taxation and trade regulations.
The project would also face broader challenges, including international sanctions affecting Iran, Afghanistan’s economic difficulties and the need to establish a stable regulatory framework capable of attracting long-term private-sector investment.
If advanced, the proposal could become part of wider efforts to develop new trade and transit corridors across Central and South Asia, linking Afghanistan’s natural resources and strategic location with Iranian infrastructure and China’s investment capacity. For now, however, the plan remains a proposal requiring further government-level discussions and formal agreements before it can move towards implementation.