Forex-starved Pakistan allows barter trade with Russia, Iran, Afghanistan

Pakistan which is in the throes of a severe liquidity crunch has decided to start barter trade with Iran, Russia and Afghanistan, allowing the state-owned enterprises and private sector to immediately engage both in the import and export of goods with these countries, reported 24NewsHD TV channel.

This was stated by the Ministry of Commerce on Friday.

Pakistan has passed a special order to allow the barter trade with Afghanistan, Iran, and Russia for certain goods.

An SRO, issued in this regard, states importers and exporters, who are the Federal Board of Revenue's active taxpayers and subscribers to the Pakistan Single Window (FEW) System, can engage in the barter trade.

“Application for authorization of import and export of goods under the B2B barter trade facility shall be submitted online by the trader or their authorized agent through the online system to the regulatory collector,” the notification said.

Pakistan is in the midst of a crippling economic crisis and has foreign exchange reserves to cover just a month of imports.

The order, called the Business-to-business (B2B) Barter Trade Mechanism 2023, allows for the import of gas and petrol from Iran and Russia through barter, amongst other goods.

In April, Pakistan made its first purchase of discounted Russian oil. However, there was no confirmation about the mode of payment.

The trade of goods under a B2B Barter Trade arrangement will be allowed on the principle of “import followed by export" and export would meet the value of imported goods. 

The ministry has identified some 26 goods that can be exported to Afghanistan, Iran and Russia including milk, cream, eggs and cereal, meat and fish products, fruits and vegetables, rice, salt, pharmaceutical products, finished leather and leather apparel, footwear, steel, and sports goods. 

The government has notified the products to be imported from Afghanistan, which include fruits and nuts, vegetables and pulses, spices, minerals and metals, coal and its products, raw rubber items, raw hides and skins, cotton, and iron and steel.

From Iran, Pakistani importers are allowed to import fruits, nuts, vegetables, spices, minerals and metals, coal and related products, petroleum crude oil, LNG and LPG, chemical products, fertilizers, article of plastics and rubber, raw hides and skins, raw wool and articles of iron and steel.

From Russia, Pakistani traders will be allowed to import pulses, wheat, coal and related products, petroleum oils including crude, LNG and LPG, fertilizers, tanning and dying extracts, articles of plastic and rubber, minerals and metals, chemicals products, articles of iron and steel, and items of textile industrial machinery.

 

Reporter Waqas Azeem