Iqbal, who is from the Pakistan Muslim League party, sustained a bullet wound on his right shoulder and was immediately taken to District Headquarters Hospital for treatment. Authorities said he was out of danger.
"Ahsan Iqbal was targeted and shot in the arm," Asim Khan, a special aide to the politician, told news agency AFP. "He is out of danger and being taken to a medical facility in Lahore."
The suspect, believed to be in his early 20s, was taken into police custody and is being interrogated. District police officer Imran Kishwar said the attacker used a 30-bore pistol to fire at Iqbal from a distance of around 18 metres, reported PTI.
The minister was attending a political gathering in his hometown Narowal in Punjab province when the attack on him took place.
Punjab chief minister Shahbaz Sharif has sought a report from inspector general (IG) Punjab and has directed the authorities to take action against the culprit.