Amanollah Shahnavazi, who serves as deputy chairman of Iran-Pakistan Joint Chamber of Commerce, said on Saturday that barter trade with Pakistan will lead to a boom in trade between the two neighboring countries as it removes the need to use hard currencies to settle trade transactions.
“In case this issue of barter trade becomes operational we will see a considerable increase in exports which is a big, important development,” Shahnavazi was quoted as saying by the IRIB News.
He said that Pakistani businesses will also benefit from the barter mechanism in trade with Iran, adding that the decision will also enables Islamabad to spend less from its foreign exchange reserves for imports of essentials.
The Pakistani government on Friday authorized an order that allows barter trade for certain goods, including petroleum and natural gas with Iran, Russia and Afghanistan.
The Pakistani Ministry of Commerce has said that state and privately owned entities would need approval to participate in the Business-to-business (B2B) Barter Trade Mechanism 2023.
The measure aims to reduce the demand of foreign exchange for imports at a time Pakistan faces dollar shortages.
Pakistani authorities say the new barter arrangement could discourage fuel smuggling from Iran, an issue which experts believe has badly hurt petroleum businesses in the country.