Pakistan is considering exporting rice and pharmaceuticals to Afghanistan against Pakistani currency to help out the neighboring country in dealing with the situation that has arisen due to the freezing of foreign funds by the international community.
Sources told ProPakistani that the Ministry of Commerce and the government of Pakistan had prepared a summary for ECC to get formal approval for this particular issue.
Afghanistan is struggling with depleting forex reserves after the Taliban regime took over on 10 August 2021. Pakistan has already provided relaxations to Afghanistan as good gestures by reducing or eliminating taxes and duties of import from and exports of selected and essential items to Afghanistan.
In order to facilitate the export of perishable goods to Afghanistan, exports of fruit, vegetable, dairy products, and meat are already allowed on the filing of regular shipping bills without the requirement of E-form.
The sources further said that due to the precarious situation arising owing to the freezing of foreign funds of Afghanistan by the International community, the Ministry of Commerce is exploring measures to carry out trade with Afghanistan by adopting alternate methods besides banking channels.
Pakistan is considering expanding the list of items that are allowed to be exported to Afghanistan against Pakistani currency by including rice and pharmaceutical items in the list since Pakistan has significant exports of these goods to Afghanistan, they said.
Estimates show that Pakistan is a major rice exporter to Afghanistan. Pakistan has exported rice and pharmaceutical products worth $157 million and $90 million to Afghanistan. The sources said that the Federal Board of Revenue (FBR) has supported the proposal to include rice and pharmaceuticals in the list of items exportable to Afghanistan against Pakistani currency.
However, the Finance Division and the State Bank have not supported the said measure. They believe that in the given political situation and owing to the absence of banking system in Afghanistan, any payment in Pakistani Rupee by Afghani importers would be arranged locally from within Pakistan, and therefore, the value of exports would not be revived in Pakistan, giving rise to the practices of hundi, hawala or illicit trade.
Consequently, the ECC has to decide to take up the matter in the meeting, which was forwarded to the forum some weeks ago by the Ministry of Commerce.
