The Senate Standing Committee on Commerce has called on the Ministry of Commerce (MoC) to urgently resolve the ongoing challenges and ambiguities surrounding Pakistan’s barter trade policy with Iran, Afghanistan, and Russia. The committee warned that the lack of clear frameworks risks hindering the potential of these trade arrangements.
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During a meeting chaired by Senator Anusha Rehman, the committee focused on strategies to achieve national export targets, with significant attention paid to the evolving barter trade mechanisms with neighboring countries. Members expressed concern over the existing policy uncertainties, particularly concerning trade with Iran, Russia, and Afghanistan, which has become necessary due to banking restrictions.
Senator Hamid Khan voiced strong criticism against the separate existence of barter and traditional trade policies, labeling it “malicious” and emphasizing that global trade typically operates under a unified Import Policy Order (IPO). Senator Saleem Mandviwalla, however, underscored the strategic importance of barter trade in combating cross-border smuggling, stating its potential to curb illicit trade with Iran and Afghanistan.
Traders affected by the current delays informed the committee that over 1,200 trucks carrying goods under barter agreements, primarily sesame seeds and rice, are stranded at the border due to unresolved procedural obstacles in the non-dollar-based transaction system. In response, the committee decided to convene a joint meeting involving the finance minister, commerce minister, and the State Bank of Pakistan (SBP) governor to find a solution.
Documents presented to the committee revealed that the Ministry of Commerce has finalized a draft proposal to exempt Iranian-origin imports via land routes from Electronic Import Form (EIF) requirements. This exemption aims to facilitate trade in the absence of formal banking channels and has been circulated for feedback from the Federal Board of Revenue (FBR), SBP, and Finance Division before being submitted to the Economic Coordination Committee (ECC) of the Cabinet.
The proposed exemption from paragraph 3 of the Import Policy Order 2022 and EIF regulations under the SBP’s Foreign Exchange Manual would specifically apply to Iranian goods imported by land until formal banking ties are established. It would not extend to non-Iranian goods transiting through Iran, as regular banking channels are available for those transactions. The FBR will be responsible for verifying the origin of goods under existing customs laws. The current EIF exemption for Iranian imports is set to expire on May 15, 2025. The Ministry of Commerce is also reviewing the broader barter trade framework and relevant regulations in consultation with stakeholders to ensure the system’s effective implementation.
Recent decisions include aligning barter trade rules with the Import and Export Policy Orders 2022 and removing the predefined list of tradable goods in existing regulations. The ministry is also awaiting input from the Ministry of Foreign Affairs regarding sanctioned entities. The FBR is expected to propose amendments to allow credit transfers or netting of trade values within the barter system.
While acknowledging the necessity of EIF waivers given the lack of banking relations with Iran and Afghanistan, the SBP cautioned against potential misuse. The central bank recommended strengthening controls within the WEBOC and Pakistan Single Window (PSW) systems to ensure that only legitimate traders benefit from these exemptions. The SBP also advised prioritizing the full operationalization of the barter trade mechanism over continued reliance on EIF exemptions, which they warned could encourage informal financial settlements.
Furthermore, the Ministry of Commerce has proposed mandatory certificates of origin for all goods imported from Iran and Afghanistan to ensure compliance with customs regulations and prevent the circumvention of import restrictions, particularly for high-risk items.
The committee also addressed the issue of illegal trade, including the smuggling of tobacco, pharmaceuticals, and tires. A subcommittee was formed to develop recommendations for the tobacco sector, while the issue of counterfeit medicines was referred to the Senate Standing Committee on Health.
In a move to modernize trade practices, the committee urged the Ministry of Commerce and various trade associations to adopt a digitized system presented by Galaxefi Solutions. The company’s CEO detailed how their automation and AI solutions could transform cross-border trade operations.
Trade and Investment Officers (TIOs) posted abroad also briefed the committee on emerging global trade opportunities, highlighting Pakistan’s ongoing efforts to expand its international trade.
The meeting saw the participation of several senators and senior officials from the Ministry of Commerce, private sector representatives, and international trade officers.
