Pakistan losing $2.2m daily in Iran trade

The Senate Standing Committee on Finance on Wednesday referred the issue of 600 Iranian trucks stranded at the Pakistan-Iran border to Prime Minister Shehbaz Sharif, recommending that the matter be reviewed by the federal cabinet.

Iranian diplomats raised concerns that Pakistan's imposition of a bank guarantee requirement on Iranian trucks has led to daily losses of $2.2 million.

During a meeting chaired by Senator Saleem Mandviwalla at Parliament House, Iranian diplomats informed the committee that Pakistan had reinstated a bank guarantee requirement for Iranian trucks despite its removal in a 2008 agreement.

The diplomat pointed out that while Pakistan has imposed the condition, Iran has not placed any such restriction on Pakistani trucks.

Moreover, the enforcement of this requirement has severely impacted bilateral trade, reducing the number of Iranian trucks entering Pakistan from 600 to 400 over six months, with some drivers waiting over a month at the border.

The diplomat further stressed that free movement is a fundamental aspect of bilateral agreements, and reopening the Rimdan crossing was essential to ease border trade.

Senator Saleem Mandviwalla said that Pakistan and Iran conduct trade through a barter system. However, complicated customs regulations have brought transactions to a standstill.

Senator Farooq Naek strongly criticised the situation, calling it an eye-opener and a disgrace, questioning why foreign diplomats had to remind Pakistan how to manage its own trade affairs.

Expressing frustration over the country's governance, he remarked that no one seemed to be working in the national interest.

Similarly, Senator Shibli Faraz accused the bureaucracy of creating obstacles instead of facilitating trade and criticised the Federal Board of Revenue (FBR) for failing to assist traders despite the backlog of Iranian trucks.

Senator Anusha Rahman slammed customs officials for creating unnecessary hurdles, arguing that they had turned customs into a personal business by demanding documents beyond their authority and forcing traders into avoidable bureaucratic loops.

In response, customs officials denied that the bank guarantee was affecting border trade, clarifying that Iranian trucks were granted clearance without such conditions.

They claimed that goods cleared at Taftan did not require a bank guarantee and accused Iranian traders of attempting to transport duty-free goods from Taftan to Quetta, which was against regulations.

Officials clarified that the bank guarantee requirement applied to bilateral trade, not barter trade, and that third-party goods could not enter Pakistan through the barter system.

Subsequently, the panel decided to escalate the matter to the prime minister, urging the federal cabinet to intervene and resolve the crisis.