Pakistan and Iran have finalised the text of their proposed Free Trade Agreement (FTA), aimed at increasing bilateral trade. The two countries are now exchanging lists of items on which tariffs will be reduced to zero or lowered.
As per reports, the Ministry of Commerce shared this development in a briefing to the Senate Standing Committee, chaired by Senator Anusha Rahman. The meeting, attended by key officials including Commerce Minister Jam Kamal Khan and Secretary Jawad Paul, addressed the current status of trade relations with Iran, barter trade issues, and non-tariff barriers.
Initially, a disagreement arose between the Committee Chairperson and the Secretary of Commerce regarding the closure of the Badini crossing point. Business leaders in Balochistan voiced concerns about the impact of this closure on barter trade with Iran and its effects on trade with Afghanistan.Â
The Ministry acknowledged Iran’s seasonal ban on some Pakistani exports, such as mangoes and rice, to protect its local agriculture but confirmed that these issues were being addressed with Iranian authorities.
On barter trade, the Ministry presented a new SRO (Special Regulatory Order) to replace the existing SRO 642(1) 2023, which seeks to address five key issues raised by the business community. These include simplifying the product verification process, expanding the list of items eligible for barter trade, and allowing the formation of consortia for trade instead of restricting it to single entities. The Ministry also extended the net-off period for goods under barter trade from 90 days to 120 days.
Commerce Minister Jam Kamal Khan emphasised the importance of these changes in facilitating trade with Iran, which he hopes will help Pakistan meet the $10 billion trade target with Iran. He also announced plans to visit Iran next month for the Joint Economic Commission (JEC) to discuss all trade-related matters in detail.
The committee also discussed the reopening of the Badini crossing, which had been closed after Afghanistan withdrew its customs staff. The Ministry of Commerce pledged to pursue the issue with Afghan authorities and explore alternatives like containerization to restart trade. Additionally, discussions were held on improving road infrastructure at the border and constructing cold storage facilities to enhance trade logistics.
The committee reiterated the need to strengthen Pakistan-Iran trade ties, highlighting the role of the private sector in expanding economic activity in border regions. They also welcomed the progress on the maize export protocol with China, which was approved with the Prime Minister’s office intervention.
The committee concluded by emphasising the importance of resolving these trade and border issues to facilitate smoother cross-border exchanges and meet the $10 billion trade target set by the Prime Minister.
