ISLAMABAD: The decision of the government of Pakistan to allow multimodal bonded air-to-land transit of Afghan cargo will facilitate exporters and importers of both Pakistan and Afghanistan to a great extent, WealthPK reports.
The decision will enhance trade between the two neighbouring countries and ensure an uninterrupted supply of goods to crisis-hit Afghanistan besides leaving a positive impact on the political scenario of the region.
It is pertinent to mention here that Afghanistan-Pakistan Transit Trade Agreement (APTTA) signed in 2020 did not cover multimodal bonded air-to-land transit of cargo. However, the revised version of the agreement covered it.
In the wake of the economic crisis in Afghanistan after the fall of its government last year, Pakistan’s Ministry of Commerce sought approval from the federal government to allow multimodal bonded air-to-land transit of Afghan cargo from Islamabad airport and then further shipment on trucks through Torkham and Ghulam Khan crossing points by road.
The Federal Board of Revenue (FBR) had suggested to the Ministry of Commerce to allow a multimodal air-land corridor for both forward (Afghan airports from the world) and reverse transit cargo (Afghan exports to the world) to/from all international airports of Pakistan.
In the border regions of Pakistan and Afghanistan, trade is a significant source of income for locals after agriculture. A large number of people on both sides of the border are associated with transit trade between the two neighbouring countries. They earn livelihoods for their families by directly or indirectly engaging in transit trade activities.
However, security problems on both sides of the border frequently affect the seasonal trade. Traders of both countries often have to pay extra money to local authorities to ensure that their goods reach their destination safely. It increases the cost of trade exponentially.
The recent decision of FBR to allow a multimodal air-land corridor for Afghanistan will benefit traders of both countries besides thousands of people living on both sides of the border.
Pakistan Carpet Manufacturers and Exporters Association (PCMEA) has welcomed the government’s decision to allow the delivery of goods through the corridor between Afghanistan and Pakistan.
Muhammad Amin, a member of the Pakistan Carpet Manufacturers and Exporters Association (PCMEA), told WealthPK that traders and exporters appreciated the government for deciding to allow the delivery of goods by air between Pakistan and Afghanistan.
He said that raw materials for Pakistan’s handmade carpets were imported from Afghanistan. “It is quite difficult to import the raw materials owing to obstacles and challenges at the Torkham border,” he added.
Muhammad Amin said that it was not possible to fulfil the foreign orders timely owing to an unusual delay in the import of semi-finished goods from Afghanistan through the Torkham border. He added that the government’s decision would resolve the issues faced by both exporters and importers. He said that economic cooperation between Afghanistan and Pakistan would create a lot of employment opportunities in both countries.
“The governments of both Pakistan and Afghanistan need to take more steps to cement and enhance bilateral trade relations. Both countries should work on infrastructure projects to reduce transportation costs,” he said.
Muhammad Amin said that the recent decision of the government would strengthen the national economy. The government should provide relief to traders in freight charges for importing raw materials and finished products so that they could compete with their rivals in the international market, he told WealthPK.
The economic ties between Pakistan and Afghanistan show a clear trend of dependency. Both countries seem to understand that long-term security, peace and stability in the region can be ensured by exploiting ethnic and geopolitical links between them as instruments for economic growth.
There is an urgent need for multiple reforms in bilateral trade. The Pak-Afghan border, a major hub of trade and commercial activities, can generate handsome revenues for individuals as well as for states.
Being a landlocked country, Afghanistan relies on Pakistan and Iran for its exports. Afghanistan holds significant potential for investment by Pakistani traders. However, it needs to streamline financial mechanisms and develop better infrastructure besides resolving security issues.
