Pakistan Approves New Barter Trade Policy With Neighbors

ISLAMABAD, Pakistan has approved a revised barter trade framework to enhance business with Afghanistan, Iran, and Russia, allowing for more flexible and efficient exchange of goods.

According to an official notification, the government has made key amendments to the existing Business-to-Business (B2B) Barter Trade Mechanism. The duration for completing barter transactions has been extended from 90 to 120 days, and new clauses have been added to align with the national import-export policy.

One of the major changes includes the removal of the condition that required imports to take place before exports, enabling both transactions to occur simultaneously. Additionally, the updated policy now requires traders to balance the value of their imports and exports every quarter. Failure to do so could result in the suspension of their trade authorization.

The revised framework also permits private entities to form consortiums for barter trade, while customs officials will monitor trade volumes and values on a quarterly basis to ensure compliance. Violations, including tax defaults, will lead to legal and financial consequences.

Exporters have been brought into the new system under a broader trade policy, replacing the previous limited list of eligible goods with one consistent with Pakistan’s general import-export regulations.

Officials said that the updated framework was developed in collaboration with the State Bank of Pakistan, the Federal Board of Revenue (FBR), and the Ministry of Foreign Affairs. The move comes after the 2023 mechanism faced difficulties in implementation, prompting the government to introduce a more practical and business-friendly policy.