Economy, Domestic Economy
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Pakistan to Facilitate Trade

Pakistan to Facilitate Trade Pakistan to Facilitate Trade

The Pakistani government is to take measures to remove hurdles in making payments to Iran. The problems include the international sanctions against Tehran over its nuclear energy program, high import tariffs, and border restrictions, the Express Tribune has reported.

According to a study conducted by the Pakistani Ministry of Commerce, the main stumbling block for trade with Iran is payments for goods in the face of international banking restrictions. Officials say Pakistani and international banks could see their accounts frozen and also face a ban on property purchases there if they process transactions with Iran.

Besides, Iran charges import tariffs as high as 200% to protect its domestic industries. Tehran has also put in place border restrictions on movement of trucks, officials say. It closes the border in the afternoon and trucks have to wait to cross into the other side.

After crossing the Iranian city of Zahedan, traders have to pay a tax of $1 after every three kilometers. Officials blame these key issues for the decline in bilateral trade to just $300 million per year compared to $1 billion in the past years.

The western-led economic sanctions against Iran over its nuclear program are fueling the flow of smuggled goods, especially petroleum products, to Pakistan and a slump in authorized bilateral trade, the Express Tribune wrote on Monday.

The newspaper also writes that Pakistan is studying the cases of India and Turkey, which are among Iran’s major trading partners and are making payments in different modes.

Pakistan has also made some payments through barter trade. There is an understanding in government circles that these modes of payment – barter deals, exchange of precious metals like gold or transfers through local banks that do not have overseas branches – should be studied and adopted to step up trade with Iran.

 

Financialtribune.com