2 days ago
- Business
- Business Recorder
MoC prepares mechanism for barter trade with Iran
ISLAMABAD: Ministry of Commerce (MoC) has prepared a viable mechanism for barter trade with Iran in consultations with the stakeholders, as State Bank of Pakistan (SBP) is unwilling to support formal trade with Iran owing to the US restrictions.
This update was shared by Secretary Commerce Jawad Paul with Senate Standing Committee on Commerce on Wednesday, presided over by Senator Anusha Rahman Ahmad Khan. The Committee assured full support to Commerce Ministry in this regard so that Pakistan's exports to Iran can begin as officially exports to Iran are zero. With amendments to the SRO, more items will be included to the existing list which will be almost at par with the Export Policy Order. However, the issue of 'certification authority' is yet to be sorted out.
According to Commerce Ministry, in pursuance to the decision of the ECC, Ministry of Commerce issued S.R.O 642 (1)/ 2023 on June 1, 2023, whereby, B2B Barter Trade Mechanism was notified for enhancing bilateral trade with Afghanistan, Iran and Russia along with list of exportable/ importable products. Since its inception, there have been issues in the operationalisation of the B2B barter trade as highlighted by the business community and public stakeholders.
Pakistan, Iran: Work on mechanism to institutionalise barter trade underway
Following recommendation of the Senate Standing Committee on Commerce in its meeting held on January 15, 2025, the Ministry of Commerce had notified the committee comprising of public and private stakeholders notified with the objective to identify gaps and issues in the B2B Barter Trade Mechanism (S.R.O.642).
The Committee convened multiple meetings with the stakeholders to identify the gaps and issues in the Barter Trade Mechanisms. During the consultations, following issues were highlighted by the private sector: (i) verification of sanctioned/ non-sanctioned products/ entities by respective Pakistan Missions abroad; (ii) limited list of exportable/ importable products; (iii) principle of 'import followed by export'; and (iv) absence of multiparty contract(s); i.e., consortium. Based on the recommendations of the Committee, a report was submitted to the Senate Secretariat.
Secretary Commerce further stated that on the directions of PMO, the Ministry of Commerce held wide-ranging consultations with the public-private stakeholders for early operationalization of the B2B Barter Trade Mechanism (S.R.O 642 (1)/ 2023).
After detailed deliberations held with the SBP, MoFA, FBR and PSW during the meetings held on May 19, May 27 and May 29, 2025 , following amendments in the subject SRO have been prepared: (i) the list of importable products as specified in Appendix-A of the S.R.O 642(1) /2023 may be omitted and aligned with Import Policy Order (IPO)/ Export Policy Order (2022); (ii) role of the Pakistan Mission/ MoFA for verification of sanctioned/ non-sanctioned products/ entities be done away with, instead, the Pakistani private entity shall be required to give an 'Undertaking' that the foreign company or individual for BT is not a 'sanctioned entity' by the UN and others; (iii) the principle of 'import followed by export' may be replaced with 'Imports/ Exports'; (iv) Pakistani traders shall be responsible to net off value of goods on quarterly basis; i.e., within 90 days of the transaction (wholly or partially) as allowed by the regulatory Collectorate of Customs in the authorisation; and (v) allowing private entities (02 or more) to form 'Consortium' from Pakistan to enter into a single contract and a single trading partner.
In light of deliberations, a draft Notification is being prepared and the same will be circulated to all concerned stakeholders for views/ comments. Upon receiving concurrence of the stakeholders on the proposed amendments, the Ministry of Commerce shall issue a notification of the same as empowered under Para 8(4) of the S.R.O 642 (1) /2023 without the requirement to place the matter before the ECC/ Cabinet.
The meeting also approved amendments to anti-dumping duties (amendment Bill 2025) to refund amount to Chinese companies which built Gwadar Airport and a hospital at Gwadar through grant in aid, after some 'ifs and butts' raised by PTI Senators and clarification from Commerce Ministry and National Tariff Commission.
The Committee was briefed that the first amendment in the said act was made in 2022 in the backdrop of two Chinese projects pertains to Gwadar Airport and Hospital. However, the proposed amendment has been brought forward for the second time. These amendments are provided for the said two Chinese projects, and there is no other related project in this connection. The first amendment made in 2022 did not fully address the need and does not have retrospective effect. Hence, a second amendment is still required for the retrospective effect in order to bring the FY 2020-2021 & 2021-22 into the ambit of this Act. It was informed that the said bill has been passed by the National Assembly.
The Chairperson Committee expressed concerns, asking whether it could happen in the future that any project might be added and the amount could increase. The Ministry stated that no such project related to levying of duties on foreign grant-in-aid for anti-dumping duties was carried out during 2020-2022 except the above-mentioned two Chinese projects. After extensive deliberation the bill was unanimously passed.
Ministry of National Food Security and Research apprised the committee of a summary to allow export of maize and herbal medicines to China which is ready for final nod of Cabinet, after being grilled by Chairperson Standing Committee for not being active in opening doors for export.
The Committee discussed status of protocols pending for Cabinet approval with Ministry of National Food security and Research regarding corn/ maize/ wild/ dried fruits/ nuts/ herbal medicine equated products; etc. Spokesperson, Ministry of National Food Security told the protocols related to herbal products and maize are in finalization stage and once approved by the Chinese government, the gateway of imports and exports of such products with China will be opened.
Chairperson Committee Anusha Rehman told the Committee that she had visited China and found out that no export protocol has been done for dry fruits. 'Protocols should be established for all herbal and dry fruit products in Pakistan that can benefit us economically. This is in our interest.'
The Chairperson recommended the concerned Trade & Investment Officer to submit a market intelligence report on those potential products which are produced in Pakistan and China has a huge potential of importing those products from Pakistan, but are delayed due to certain protocols. The doors to China's demand for herbal products and dry fruits remain closed only due to the absence of protocols.
The Committee also directed Commerce Ministry to liaison with Ministry of Foreign Affairs, on the issue of ASEAN Free Trade Agreement (FTA) as Commerce was not in the loop on this issue.
The Committee refused to hear the representatives of Karachi Chamber of Commerce and Industry (KCCI) against the law which allows opening of Chambers in every district despite the fact President KCCI Jawed Bilwani argued against the current status of chambers already opened in Karachi including a women chamber.
However, Chairperson Standing Committee asked Director General Trade Organisations (DGTO) Bilal Khan Pasha to proceed as per the law and give proper opportunity to KCCI in this regard. Secretary Commerce suggested the KCCI representative to wait for reply of its letter sent to Commerce Ministry.
Copyright Business Recorder, 2025
