Pakistan Replaces Bank Guarantee With Insurance For Afghanistan's Transit Trade Via Gwadar Port
Date
1/18/2025 5:03:16 AM
(MENAFN- Khaama Press) Pakistani media outlets reported on Saturday, January 18, that the government has replaced the bank guarantee system with an insurance guarantee to facilitate transit trade between Pakistan and Afghanistan, particularly for goods passing through Gwadar Port.
This initiative is part of the Afghanistan-Pakistan Transit Trade Agreement (APTTA) of 2010. The bank guarantee requirement had posed challenges for bulk cargo imports such as wheat, sugar, and fertilizers, which the new insurance guarantee aimed to resolve.
Meanwhile, Mohammad Sadiq, Pakistan's Special Representative for Afghanistan, stated on his social media platform X on January 18:“Pakistan has decided to replace the requirement of a bank guarantee with an insurance guarantee for the bulk cargo of Afghan transit trade through Gwadar Port. This change will specifically facilitate the import of Di-Ammonium Phosphate (DAP) and other bulk cargoes such as wheat, sugar, and fertilizers. This measure will support the Afghan business community and consumers and is a step toward enhancing ease of doing business through Pakistan.”
The recent decision to waive bank guarantees applies exclusively to urea imports, a vital agricultural input for Afghanistan, which relies on importing approximately 900,000 tons annually. This measure is expected to ease trade restrictions and support Afghanistan agriculture.
In October 2023, Pakistan imposed stricter transit trade regulations to curb smuggling and apply economic pressure on Afghanistan. These measures aimed to address security concerns linked to banned militant groups operating in the region.
Recent clashes along the Pakistan-Afghanistan border have led to restrictions and temporary closures, further complicating transit trade. These disruptions have strained bilateral trade and hindered the movement of essential goods, including agricultural inputs like urea.
To ensure smoother trade relations, both nations must prioritize de-escalating tensions and addressing security concerns collaboratively. Restoring stability at the borders is crucial for maintaining economic ties and supporting Afghanistan's agricultural and consumer needs.
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