In a historic move, Pakistan approves barter trade with Iran and Afghanistan
The government has finally given legal cover to the barter trade with Iran and Afghanistan, according to two notifications issued by the Ministry of Commerce.
Ministry of Commerce has issued SRO.484(I)/2022 and SRO.485(I)/2022 to amend the Export Policy Order (EPO) 2020 and Import Policy Order (IPO) 2020 to formally start barter trade with Iran and Afghanistan.
Through these notifications, Pakistan has cleared a legal mechanism to provide for barter trade with Iran and Afghanistan. According to these notifications, imports and exports shall be allowed under the barter trade arrangement as approved by the Commerce Ministry.
In a past meeting, the Economic Coordination Committee (ECC) of the cabinet took up a commerce ministry’s summary for ‘grant of regulatory support for establishing barter trade arrangements with Afghanistan and Iran’ and, after discussions, “allowed [the] regulatory cover to barter trade arrangements by amending relevant provisions of Export Policy Order (EPO) 2020 and Import Policy Order (IPO) 2020”.
According to the Commerce Ministry, in 2019 a high-powered committee under the chairmanship of the Minister of State for Revenue was constituted to look into the impediments in the way of Pak-Iran bilateral trade. During the 8th JTC, held on July 4-5, 2019, the Iranian side shared a draft barter trade mechanism for consideration and finalization by Pakistan. In light of detailed deliberations involving relevant public and private sector stakeholders, the State Bank of Pakistan submitted a proposal for establishing a barter trade mechanism between Pakistan and Iran as the best viable option.
Subsequently, this Ministry arranged multiple meetings with stakeholders wherein it was decided that Quetta Chamber of Commerce & Industry (QCCI) from the Pakistan side and Zahidan Chamber of Commerce & Industry (ZCCI) from the Iran side would sign an MoU to establish a barter trade mechanism.