Pakistan's Commerce Ministry has issued a statutory regulatory order (SRO) to officially allow barter trade with Iran.
This comes after Iran and Pakistan private sectors stressed the need for introducing a barter trade mechanism between the two countries.
During a visit to Iran Chamber of Commerce in late February, President of Lahore Chamber of Commerce and Industry Mian Nauman Kabir reiterated the determination of the private sectors from both countries to boost trade saying “even if barter trade cannot be widely implemented in trade between Tehran and Islamabad, the Pakistani private sector is determined to make use of other alternate methods for boosting bilateral trade.”
Speaking as the meeting, President of Iran Chamber of Commerce, Industries, Mines, and Agriculture (ICCIMA) Gholam Hossein Shafei regretted that despite the neighborhood and high economic capacities, the volume of trade between the two countries is not satisfactory.
Iran first proposed barter trade and use of local currencies to boost commercial exchanges between Tehran and Islamabad during an official visit by Pakistani Prime Minister Imran Khan to Iran in 2019.
“It will provide a boost in our exports to Iran, especially of rice,” Pakistan Ambassador to Tehran Rahim Hayat Qureshi said urging the private sector to step forward and take advantage of the opportunity.
The map shows border crossings on the joint border between Iran and Pakistan
Following the decision by Pakistan’s Commerce Ministry, Fida Hussain Dashti, president of Quetta-Balochistan Chamber of Commerce and Industry, asked the Federal Board of Revenue (FBR) to immediately take measures to implement it in border areas.
The State Bank of Pakistan (the central bank in the country) has also endorsed a proposal for establishing a barter trade mechanism between the two neighboring countries.
Iran and Pakistan are going to implement a free trade agreement within the coming months, according to Iranian Industry, Mining, and Trade Minister Reza Fatemi Amin.
“By removing the existing problems and obstacles to the development of economic and trade cooperation between Iran and Pakistan the volume of trade between the two countries will increase to five billion dollars in the next two years,” he said at the 9th meeting of Iran-Pakistan Joint Economic Committee held early November 2021 in Tehran.