Pakistan allows exports to Afghanistan in rupees

Experts welcome development, saying it will help gain access to Afghan markets

Usman Hanif February 12, 2022
Trucks loaded with supplies wait to cross into Afghanistan at the Friendship Gate crossing point, in the Pakistan-Afghanistan border town of Chaman. PHOTO: REUTERS


In a bid to streamline regional connectivity and trade, Pakistan has allowed traders the export settlement of 14 items with Afghanistan in local currency.

The items included poultry, meat, cement, pharmaceutical products, textile, fruits, vegetables, salt, rice, surgical instruments, etc, revealed Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood.

On his official Twitter handle, the adviser on Friday mentioned that the Ministry of Commerce had been receiving queries about exports to Afghanistan in Pakistani rupee.

“We would like to clarify that to ease exports to Afghanistan, the Ministry of Commerce has allowed export settlement of 14 items in Pakistani rupee,” Dawood added.

Talking to The Express Tribune, Employers Federation of Pakistan (EFP) President Ismail Suttar appreciated the development and said that it would pave the way for gaining access to Afghanistan’s markets again.

“In the past, we lost Afghan markets to the Indians, however, it is our turn now to take the advantage,” he remarked.

Pakistan Businesses Forum (PBF) officials also viewed the move as a positive initiative taken by the Commerce Division to facilitate bilateral trade.

Border areas of both countries would reap benefits of the new development, after the issuance of Statutory Regulatory Order (SRO) 176(1)2022 by the ministry, PBF Vice President Ahmad Jawad told The Express Tribune.

In the past, bilateral trade between Pakistan and Afghanistan was facing severe hurdles, he recalled and added that regional trade and connectivity was crucial for achieving the much-required economic progress.

“We must focus on boosting regional trade,” he remarked, adding that Afghanistan carried a huge export potential for Pakistan.

In that regard, Pakistan should also hold trade shows in different cities of Afghanistan, Jawad underlined.

He was of the view that if Pakistan failed to tap markets of the neighbouring country, then other countries would grab the opportunity.

Elaborating, he cited the example of China, as the country was extending assistance to Afghanistan and planning to make inroads into its markets.

A simple mechanism for export settlement in local currency should be notified by the State Bank of Pakistan (SBP) on priority, in order to lift Pakistan’s exports to the neighbouring country to match earlier levels, Jawad emphasised.

Arif Habib Commodities CEO Ahsan Mehanti said that the bilateral trade facilitation arrangement came when the country needed to fetch US dollars through exports to pay for imports.

“Pakistan is running trade deficit in dollars and agreements to fetch export revenue in rupees may not be helpful in funding the deficit,” he said.

“Similar arrangements need to be made with China to pay for our imports in rupees to ease pressure before approaching other nations for the same mechanism.”


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