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Pakistani foreign relations

Pak-Afghan Trade Boosted by FBR's Revamped SROs

Strategic Insights

— 1 min read

The Federal Board of Revenue (FBR) has introduced revised Statutory Regulatory Orders (SROs) aimed at easing transit trade between Pakistan and Afghanistan, a move welcomed by the Pak-Afghan Joint Chamber of Commerce and Industry (PAJCCI). The amendments will reduce financial burdens on traders and promote bilateral trade. The restored option of using Insurance Guarantee alongside Bank Guarantee for goods transported under the Afghan Transit Trade agreement is a significant relief for the business community.

Key Takeaways:

  • The FBR has reinstated the option of using Insurance Guarantee alongside Bank Guarantee for goods transported under the Afghan Transit Trade agreement, reducing financial burdens on traders.
  • The implementation of a 10 percent processing fee on certain imported items under Afghan Transit Trade has been revised, with several items exempted from the duty.
  • The 'Negative List' comprising around 200 items has been revised, with several items excluded from the list.
  • The restoration of choice for traders and revisions in processing fees and Negative List are expected to have a positive impact on regional trade.
  • The revisions in SROs are expected to redirect Afghan transit trade back to Pakistani sea ports.
  • PAJCCI has urged for further relaxations in Pak-Afghan trade conditions to promote bilateral and regional trade.
  • PAJCCI has also emphasized the need for stricter border security and vigilance to plug smuggling instead of imposing bans on imports.

Statistics:

  • The earlier decision of October 2023 restricted traders solely to Bank Guarantees for goods transported under the Afghan Transit Trade agreement, placing a significant financial burden on them.
  • Around 200 items are included in the 'Negative List', with several items excluded from the list following the revisions.
  • Hundreds of thousands of Afghan refugees have repatriated to Afghanistan following the new policy of Pakistan, leading to an increase in import of goods for Afghanistan under transit trade facility.

Sources:

  • Pak-Afghan Joint Chamber of Commerce and Industry (PAJCCI)
  • Federal Board of Revenue (FBR)
  • Khyber Pakhtunkhwa government

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