Govt Saves Exports Via Iran Border After Trade Route Blocked From Afghanistan

The federal government has announced a temporary exemption from financial instrument requirements to facilitate exports to Iran, as well as to the Central Asian Republics and Azerbaijan, through the Iran land route.

According to an official notification issued by the Ministry of Commerce, the exemption relaxes provisions under Para 3 of the Export Policy Order 2022, which requires all exports from Pakistan to comply with foreign exchange rules, regulations, and procedures notified by the State Bank of Pakistan under the Import and Export Control Act, 1950.

The relaxation will remain effective for three months, from March 24, 2026, to June 21, 2026. Earlier, exporters reportedly faced operational challenges, as several banks, including Askari Bank, Soneri Bank and Habib Bank Limited refused to facilitate transactions due to the absence of formal operational instructions.

Under the decision, Pakistan will be allowed to export rice to the Central Asian Republics and Azerbaijan through Iran’s land corridor. In addition, a wide range of commodities may be exported to Iran via the same route, including milled rice, seafood, potatoes, meat, onions, maize, citrus fruits, bananas, tomatoes, frozen chicken, pharmaceuticals, and tents.

The notification states that the exemption is subject to the condition that exporters submit an undertaking confirming that export proceeds will be repatriated within the prescribed timeframe.

The move comes amid disruptions in Pakistan’s traditional export route to Central Asia through Afghanistan. Prolonged border closures have significantly reduced exports to both Afghanistan and Central Asian markets, prompting authorities to explore alternative trade corridors.

During the first eight months of FY2025-26 (July–February), Pakistan’s trade with Afghanistan contracted sharply. Exports declined to approximately $219 million during July–December 2025, representing a drop of more than 56 percent compared to the same period last year. Exports to Central Asia also remained subdued at around $109 million, reflecting ongoing transit constraints.

Officials said the temporary exemption aims to ease trade flows while helping exporters regain access to regional markets through alternative routes.