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Pakistan Finally Resumes Trade With India After 19 Months

The Federal Minister for Finance and Revenue, Muhammad Hammad Azhar, chaired the meeting of the Economic Coordination Committee (ECC) of the Cabinet today.

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To boost the value-added exports in the textile sector, the ECC allowed the import of Cotton and Cotton Yarns from India to bridge the gap between demand and supply of the raw materials required to maintain the surge of exports, especially in the textile sector. The import will be allowed through land and sea routes till June 30th, 2021, until the arrival of the new cotton crop.

ECC allowed the commercial import of white sugar from India up to 500,000 MT till June 30th, 2021, through land and sea routes, based on a quota issued by the Ministry of Commerce. The decision will be time and cost-effective and would also stabilize the prices of sugar in the domestic markets.

Pakistan had downgraded diplomatic relations and suspended bilateral trade with India in August 2019 after New Delhi revoked autonomy for the disputed Muslim-majority state of Jammu and Kashmir.

The ECC approved the revision of Minimum Support Price (MSP) of wheat crop 2020-21 at the rate of Rs. 1800 per 40Kg. The Committee also approved the wheat procurement targets of PASSCO and Provincial Food Departments. Import of 3 MMT of wheat through Trading Corporation of Pakistan/GTG/Private Sector was also allowed to meet the requirements of local consumers and build strategic reserves.

Petroleum Division presented a summary regarding the reduced Gasoline tariff of PARCO’s Mehmoodkot-Faisalabad-Machike (MFM) pipeline at 85 percent of the prevalent railway tariff. The Committee considered and approved the summary.

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ECC also approved the registration of Pakistan’s “Pink Rock Salt” as Geographical Indications (GI) with Pakistan Mineral Development Corporation (PMDC) to be notified as “Registrant.” Registration of Pink Salt as a GI of Pakistan will promote and enhance national and international trade, stimulate global demand and attract a premium price for Pakistan.

ECC also considered and approved the summary presented by the Ministry of Commerce regarding amendment in Export Policy Order 2020 to waive the condition of Minimum Export Price for single-use surgical instruments marked with appropriate and internationally recognized symbols/color schemes to indicate “single-use items.” The product has to be certified by Sialkot Material Testing Lab (SIMTEL) based on physical/chemical tests.

ECC also considered and approved the Addendum/Amendment to the security package document of 660 KV HVDC Matiari-Lahore Transmission Line Project proposed by the Power Division.

On the recommendation of the Ministry of Industries and Production, the ECC approved the issuance of the Government Guarantee required against the L/C facility of Rs. 2,522 million, extended by the National Bank of Pakistan to Pakistan Steel Mills.

The ECC deferred the decision on Strategic Trade Policy Framework (STPF) 2020-25. However, the ECC approved the formation of the National Export Development Board (NEDB) as requested by the Ministry of Commerce to facilitate economic outreach initiatives.


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The following Technical Supplementary Grants were also approved by the ECC:

  1. Rs. 630.808 million for the Federal Ministry of Education and Professional Training for the project, titled “Establishment & Operation of Basic Education Community Schools.”
  2.  Rs. 370.762 million for the Ministry of Federal Education and Professional Training for meeting expenditure related to various Educational Institutions/Area Education Offices.
  3.  Rs. 600 million for “Award of Allama Muhammad Iqbal 3000 Scholarships to students from Afghanistan” by the Higher Education Commission (HEC).
  4. Rs. 128.7 million for the Ministry of Housing and Works for the execution of development Schemes in the Sindh Province.
  5.  Rs. 2 billion for Prime Minister’s Low-Cost Housing Scheme.
  6.  Rs. 450 million for construction of the new building of Supreme Court, Branch Registry at Karachi.
  7.  Rs. 1.2 billion for Pakistan Atomic Energy Commission.
  8.  Rs. 22.59 million for the Ministry of National Food Security and Research for making payments pending under wheat freight subsidy scheme 2016-17.
  9. Rs. 49.189 million for the Privatization Commission for meeting various operational expenses.
  10.  Rs. 50 million to the Ministry of Energy for the execution of gas development schemes in the Sindh Province.
  11.  Rs. 50 million to HEC for payment of the educational expense of 90 Afghan students enrolled under the project, titled “Award of 3000 Scholarships to Students from Afghanistan under PM Directives.”

Federal Minister for Interior, Sheikh Rashid Ahmed, Federal Minister for Planning, Development and Special initiatives, Asad Umar, Minister for Energy, Omar Ayub Khan, SAPM on Power and Petroleum, Tabish Gouhar, Advisor to the PM on Institutional Reforms, Dr. Ishrat Hussain, SAPM on Revenue, Dr. Waqar Masood, Federal Minister for National Food Security and Research, Syed Fakhar Imam, Federal Minister for Privatization, Mohammad Mian Soomro, Advisor to the Prime Minister on Commerce, Abdul Razak Dawood, Governor State Bank, Reza Baqir, Chairman FBR, Muhammad Javed Ghani, Chairperson OGRA, Federal Secretaries and other senior officials participated in the meeting.

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