In a strategic move to ease pressure on its foreign exchange reserves, Pakistan has revised its barter trade mechanism with key regional partners — Iran, Russia and Afghanistan. The new regulatory changes, issued through a Statutory Regulatory Order (SRO) by the Ministry of Commerce, are expected to encourage cross-border trade without relying on scarce U.S. dollars.
Under the amended framework, Pakistani businesses will no longer be required to complete their export consignments before importing goods. Instead, they will have greater flexibility to balance their trade accounts over a 120-day period, up from the previous 90-day window. In addition, private companies will be allowed to form trade consortia, enabling multiple firms to engage in barter arrangements collectively.
Officials say the reforms were made after extensive consultations with the private sector and trade bodies, many of which had complained that the previous rules were too rigid to be commercially viable. “This is a practical solution that recognizes regional realities,” said a senior Commerce Ministry official. “Many of our neighbours are under sanctions or have currency shortages, so barter trade is the most realistic way to maintain commerce.”
Pakistan has long relied on dollar-denominated trade, which has left it vulnerable to foreign exchange crises. With its current account under pressure and reserves limited, policymakers are seeking alternative channels to secure essential imports such as oil, wheat, fertilizer, and industrial raw materials.
Barter trade allows countries to exchange goods and services directly, bypassing traditional banking systems. For Pakistan, this is particularly relevant with Iran and Russia — both facing Western sanctions that restrict dollar transactions.
The business community has welcomed the move, calling it a “lifeline” for industries that rely on imported inputs. “This is a win-win. We can export surplus rice, textiles, or surgical goods and import oil, gas, or chemicals without worrying about dollar shortages,” said a Lahore-based exporter.
Economists note, however, that barter trade has its own challenges, including pricing disputes, settlement delays, and limited scalability. To address these, the government is working on a digital ledger system to track transactions and reduce disputes between parties.
The timing of this decision is crucial, as Pakistan seeks to stabilize its economy, cut its import bill, and diversify trade routes. Regional trade corridors have become increasingly important in the current geopolitical climate, where global supply chains are shifting.
Officials say the revamped framework could boost Pakistan’s annual barter trade volume to over $2 billion within the next year. If implemented effectively, it may provide a much-needed cushion to the economy and strengthen ties with neighbouring countries.
