Ministry informs Senate body: Revised notification soon to resolve Pakistan-Iran barter trade issues

ISLAMABAD: The Ministry of Commerce, Wednesday, informed Senate Standing Committee on Finance that the revised notification will be issued to resolve all barter trade issues faced by traders between Iran and Pakistan.

Officials of the Commerce Ministry updated the committee that the amended SRO will be issued after receiving comments of State Bank of Pakistan (SBP) and the Federal Board of Revenue (FBR).

Discussing the recent status of barter trade between Pakistan and Iran, officials stated that the Commerce Ministry has initiated barter trade on the basis of mutual understanding between the parties, and the arrangements will be finalized after the approval of FBR and the State Bank of Pakistan.

Under the revised scheme, the list will be open for both imports and exports.

Chairman of the committee Senator Saleem Mandviwalla directed the Commerce Ministry to end discriminatory treatment with the Mango exporters and allow all exporters to avail export facility and not limited to a particular association.

FBR Member Customs (Policy) informed the committee that Ministry of Commerce has issued SRO642(I)/2023to regulate the Business-to-Business (B2B) Barter Mechanism between Pakistan, Iran, Russia and Afghanistan. However, several reservations and concerns have been raised by trade bodes, importers and exporters regarding the operational and procedural aspects of the mechanism. Owing to the issues, the barter trade regime has not taken off and so far only one company has registered for the said regime.

These issues are currently under active review and discussion by a joint committee comprising representatives from the Ministry of Commerce, Ministry of Foreign Affairs (MOFA), FBR and trade bodes among others. The aim is to address stakeholder concerns and streamline the implementation of the barter trade framework in a manner that supports bilateral trade while ensuring regulatory compliance.

The FBR Member also informed that the issues concerning barter trade furnished by the Collectorate of Customs Appraisement Taftan.

There is no mechanism for dispute settlement between importers and exporters in the current barter regime or guaranteeing body at the level of the two states in order to ensure that Pakistani exporter receives the goods against the exported shipment This is as a genuine issue which needs to be reviewed in any future barter trade for which feedback front SBP may be sought.

One of the issues which hindered the operations of the barter trade regime is that para 6(1) of the B2B SRO is based on the principle of “import followed by export”. Added to the said provision is permission to avail concessionary SROs for duty and taxes remissions which can be prone to misuse. The said decision should be lifted to the discretion of the importer and exporter and be made part of the contract instead of the SRO.

Moreover, no duty/taxes; remission should he allowed on imports for subsequent exports under the barter regime.

FBR Member stated that in terms of the para 5(2) of the currently in place SRO, Pakistan’s Mission in the barter partner countries has to certify that the items being traded under the B2B barter trade regime are non-sanctioned. However, so far no such list of items has been furnished to Customs so that the same is entered in the Customs computerized system so as to regulate the imports accordingly. Instead, the SRO only contains an Appendix-A with list of items which are allowed to be imported and exported to/from Iran, Afghanistan and Russia.

In case of Pak-Iran bilateral trade, on account of the trade deficit and type of commodities being exported from Pakistan, concerns have been raised by importers as well as Quetta Chamber of Commerce and Industry regarding issues in offsetting the quantum of exports with imports specially in scenarios where majority of our exports consist of primary agriculture products which require sanitary and phyto sanitary standards’ confirmation by the host country which sometimes arbitrarily act against our exports Hence, it is proposed that while deliberating upon any new mechanism for barter trade with Iran, guarantees must be sought so that our exports are not subjected to any non-tariff measure, FBR official said.

Most importantly, the major stakeholder in the successful implementation of any barter trade regime between Pakistan and Iran are the counter-part governments, therefore, there is a need that their willingness and readiness to any barter trade procedure/regime may be prior to issuance of any new notification, FBR Member added.

Copyright Business Recorder, 2025