Setting up of a Pak-Iran Common Border Market is
under active consideration of the governments of the two countries. On
the recommendations of Balochistan, the government has identified four
places for setting up the proposed markets at the border. These areas
include Taftan-Minjaveh, Ladgashtjalaq, Parome-Kuhak, Mand-Peshin and
The motive behind establishment of a common border
market is to sell goods at concessional rate of customs duty and other
taxes for controlling growing cross border illegal trade between
Pakistan and Iran.
Actually, a proposal for establishing common border
market with Pakistan was moved by Iran on the pattern of other such
markets already existing on the borders of Turkey-Iran,
Turkmenistan-Iran and Azerbaijan-Iran. Since Pakistan did not have the
experience of operating such markets in the past, a delegation
consisting of representatives from Balochistan and other concerned
organizations and commercial Counselor of Pakistan at Tehran had visited
Iran in this regard. After the visit, Pakistan delegation was in
agreement with the idea for establishing the border markets.
There was a consensual rationale for setting up the
markets that would promote legal economic activity in the border areas
with a view to provide economic incentives to the people in these remote
areas on both sides of the border.
According to a study, people living across the border
on both sides have little exposure to civic facilities especially the
education facility. Normally the traders avoid in procedural obligations
leading towards growing informal economy in that area. Being an arid
area in terms of climate there is no concept of agriculture in these
areas and the people have to depend on rain waters. In the face of
hardships due to non-availability of adequate drinking water, the
population is scarce which also discourage growth of industrialization
in those areas. It is expected that setting up of common border market
will eliminate smuggling, provide employment opportunities, strengthen
cultural and historical linkages between the people of both sides having
common traditions besides help promoting small and medium size
entrepreneurship in the so far neglected areas.
The government of Balochistan fully agreed with the
idea of developing a common border trade market and has reportedly
identified location as well where the proposed market would be more
viable and easy to manage.
A green signal has also been given by the Ministry of
Food and Agriculture, Ministry of Industries and Production, and the
Central Board of Revenue (CBR) for the idea for development of the
border market. However, the Ministry of Petroleum and Natural Resources
has reservations regarding expected revenue loss due to import of oil
products and also raised apprehension on the import of low quality CNG
cylinders. It may be pointed out that POL products are easily flowing
into Pakistan especially in the province of Balochistan and are being
sold at a much cheaper rate as compared to the POL prices in the
remaining parts of the country. It is alleged by the petroleum dealers
that tankers carrying refined oil even entering into Karachi and some of
the gas stations were minting money by selling the smuggled oil at the
prevailing rate in the city. Similarly, the CNG kits are the much sought
after item in the urban areas of Pakistan these days as most of the
vehicle owners are converting from oil to CNG system which must cost
effective as compared to costly oil consumption. Hence it is feared that
may affect the revenue, currently the government is getting through
imports of CNG kits from various countries. Italy is the major source of
import CNG kits due to its reliable quality.
The CBR has, however, proposed for concessionary
tariffs of 10 per cent customs duty in addition to the normal levy of
the sales tax and withholding tax on the selective items of imports
through the proposed Pak-Iran common border market.
According to actual plan, maximum 10 percent duty
rate should be imposed on the imports through that market and a 15
percent GST and withholding tax to be charged on selected items.
The proposed market is to be set up with an estimated
cost of Rs105.405 million on experimental basis essentially to check
increasing trend of smuggling and to provide employment opportunities to
the local people living along side the border.
In order to specify certain items to be allowed for
trade in common border market, a trade delegation may visit Zahidan to
study the common markets and get the first hand information of the area
and its problems that might emerge in the process.
The growing economic activity in that area would be
certainly supported by the recent agreement between Pakistan and Iran
through which people of the Makran area in Balochistan have started
receiving electricity from Iran through a 132kv grid system. Power is
being imported from Jakipur grid of Iran is now reaching Mand, Tumb,
Turbat, Hoshab, Panjgur, Pasni and Gwadar town of Balochistan. The
import of electricity from Iran will facilitate over 26,500 consumers in