By Staff Reporter
ISLAMABAD: The government is considering loosening restrictions on the largely closed border with arch-rival India to import mostly vegetables to mitigate cataclysmic floods fallout as food prices have risen sharply, a minister said on Wednesday.
“More than one international agency has approached the government to allow them to bring food items from India through the land border” finance minister Miftah Ismail said in a post on Twitter. “The government will take the decision to allow imports or not based on supply shortage position, after consulting its coalition partners & key stakeholders.”
The rain-triggered flash floods have inundated one-third of the country and destroyed farmlands, causing a threat of shortages of vegetables and fruits along with uneven price hikes of some essential commodities.
Pakistan is witnessing a massive surge in the prices of various vegetables and fruits because of the floods, which have resulted in supply-related challenges in Balochistan, Sindh, and south Punjab.
Minister Ismail said earlier this week the price of onions had shot up by more than five times, and that the government was trying to quickly implement policies to stabilise food prices — including importing from India.
The India-Pakistan trade has been largely affected after the BJP government revoked the special status of Jammu and Kashmir in August 2019 by removing Sections of Article 370, the then Imran Khan government suspended all kinds of trade with India. But after the Covid-19 pandemic, Pakistan allowed imports of drugs and pharmaceuticals from India in May 2020.
India had also withdrawn the most-favoured-nation (MFN) status for Pakistan in February 2019. It imposed a 200 percent tariff on all imports from Pakistan after the Pulwama terror attack.
Total trade between the two countries stood at $2.6 billion in FY19 before disruptions. It plunged to $831 million, $329 million, and $516 million in FY20, FY21, and FY22, respectively.
Meanwhile, the government has already allowed tax-free imports of onions and tomatoes from Iran and Afghanistan in the wake of an impending food crisis triggered by the flash floods.
The Federal Board of Revenue (FBR) has exempted all duties and taxes on the import of relief operations in flood-affected areas. Such imports will be duty and tax-free upon certification by NDMA or PDMA. The goods being sent as donations by the foreign government or international organizations and donors are also exempted from customs duties and taxes.
“Elimination of all taxes and duties in procuring the relief goods will help ensure maximum use of resources for lessening the hardships being faced by affected people,” it said in a media release.
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