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Muslimtrade Network members
about Pakistan.

P  A  K  I  S  T  A  N 


1. GENERAL PRESENTATION : *  
1.1. General characteristics : *
1.2. General information : *
1.3. The legal framework of trade relationships : *

2. TRADE STRUCTURE : *  
2.1. The main imported products : *
2.2. The main exported products : *
2.3. Trading partners : *

3. FOREIGN TRADE CONTROL : *  
3.1. Imports regulations : *
3.2. Exports regulations : *
3.3. Other formalities and documents : *

4. FINANCIAL REGULATIONS OF FOREIGN TRADE OPERATIONS : *  
4.1. Banking system : *
4.2. Exchange system : *
4.3. Methods and means for international settlement : *

5. CUSTOMS TAXATION : *  
5.1. Applicable duties and taxes : *
5.2. Special provisions : *

6. FOREIGN TRADE LOGISTIC : *  
6.1. International Transports : *
6.2. Telecommunication : *
6.3. Distribution System : *

7. USEFUL ADDRESSES *

  

1. GENERAL PRESENTATION : 

1.1. General characteristics : 

Official name  Islamic Republic of Pakistan
Area  796,000 Km²
Population  125 million in 1994
Density  156 inhabitants per square kilometer
Capital  Islamabad
Climate  Outside the Indian ocean coast, the climate is continental. The North-Eastern part of the country benefits from heavy rains in July and September; while the dry season starts from April to June. During the hot season, temperatures are generally higher than 35°C over the whole territory while in winter the average temperature reaches about 13°C.
Main holidays  March 23rd, august 14th, September 6th and 11th, November 9th, December 25th and 26th, Aid El Mouloud, Aid Al Fitr and Aid Al Adha.


1.2. General information :

Language Urdu and English
Currency  Pakistani Roupia (PKR)
Local time GMT + 5 H 30
Working hours Administration : From Saturday to Thursday : from 8 H to 16 H. 

Banks : From Saturday to Thursday : From 9 H to 13 H and Saturday : from 9 H to 12 H.
Weekly day-off Friday

1.3. The legal framework of trade relationships : 

Pakistan is notably Member of :

World Trade Organization (WTO) ; 
Organization of the Islamic Conference (OIC) ; 
Organization for Economic Cooperation, gathering central Asia Islamic countries ; 
United Nations Organization, as well as its other main specialized institutions. 

Pakistan has also signed with numerous Asian, European, American and African countries economic and commercial cooperation agreements.

2. TRADE STRUCTURE : 

2.1. The main imported products : 
Industrial and agricultural capital goods ;  
Chemicals ;  
Oil products and its by-products ;  
Raw materials ;  
Food products. 

2.2. The main exported products : 
Clothing ;  
Cotton and products thereof ;  
Rice ;  
Carpets ;  
Leather goods ; 

2.3. Trading partners :

Main suppliers

Main customers

Japan

United States

United States

Germany

Germany

United Kingdom

Saudi Arabia

Japan

United Kingdom

United Arab Emirates

Malaysia

Saudi Arabia


3. FOREIGN TRADE CONTROL : 

After its adhesion to the GATT, Pakistan has initiated a series of measures of economic and commercial reforms with a view to opening its economy to international competition by reducing its customs barriers and imports quantitative restrictions. 

3.1. Imports regulations : 

Usually, the Ministry of Commerce draws up at the beginning of each year the list of products submitted to restrictions ; the main lists are as follows : 

* Negative list containing products prohibited for imports on religious, moral, social or economic grounds ; 

* and the list of products submitted to restrictions including on the one hand, products submitted to quantitative restrictions and products reserved to public enterprises on the other. 

To comply with the new GATT's provisions, Pakistan has recently proceeded to a substantial reduction of products included in the negative list, they decreased from 300 to 75 products only. 

Pakistani importers must have themselves registered at the Export Promotion Bureau in order to obtain a registration number. 

3.2. Exports regulations : 

Exports operations are not submitted to restrictions but Pakistani exporters must have themselves registered at the "Export Promotion Bureau" in order to obtain an Export Registration number. 

Exporters must also fill the form "E" which must be certified by their bank before its presentation to the customs administration during goods customs clearance. 

Afterwards, this form will be sent to the Central Bank of Pakistan for the control of foreign currency repatriation. The latter must be achieved within 120 days starting from the date of goods shipping. 

3.3. Other formalities and documents : 

The certificates of origin which exporters are sometimes compelled to send to their foreign buyers are issued : 

* Either by the Chamber of Commerce and Industry ; 

* or by the Export Promotion Bureau. In the case of the "A" formula used within the framework of the Generalized System of Preferences managed by the GSP Committee of the UNCTAD.

4. FINANCIAL REGULATIONS OF FOREIGN TRADE OPERATIONS : 

4.1. Banking system : 

On the whole we may distinguish six banks categories in Pakistan: 

State Banks : Central Bank and three other banks ; 
Twenty foreign banks ; 
A dozen private commercial banks ; 
Investment banks ; 
Development financial institutions ; 
and modarabas, kinds of closed investments funds. 

4.2. Exchange system : 

Starting from 1994, Pakistan adopted the principle of convertibility for current operations. In other words, as concerns foreign trade operations, importers are no more required to ask for prior authorization for foreign currencies outflows. 

Exports related foreign exchange earnings must be remitted to the central Bank of Pakistan against national currency. 

With regard to the actual exchange operations, the Central Bank fixes the roupia's exchange rate in comparison with the American dollar and adjusts this rate according : 

* On the one hand, to the relative evolution of the foreign currencies of the main trading partners of Pakistan in comparison with the dollar ; 

* and to Pakistan's inflation differential with its main partners. 

4.3. Methods and means for international settlement : 

The remittance of documents can be used as a means of payment, but it should be recorded at the Central Bank. 

Likewise, the opening of documentary credit is submitted to some conditions relating to the "trading" quality of the importer but also to the kinds of imported goods (lists). 

The importer may also pay his foreign supplier in foreign currency through the Foreign Exchange Bearer certificates (FEBC) ; these instruments are may be purchased with local currency and are easily convertible into foreign currency.

5. CUSTOMS TAXATION : 

Up to 1994, the applied rates of customs duties ranged between 0 to 120% with a 70% average. After the adhesion of Pakistan to the GATT, the government worked out a new reform project providing for the following tariff structure starting from 1996-1997 : 

5.1. Applicable duties and taxes :

Customs tariff (in %) 1996/97 1995/96
     
Primary raw materials 10 10
     
Secondary raw materials    
Locally unavailable
15 20
Locally available 
20 30
Intermediate goods    
Locally available
30 45
Locally unavailable 
25 35
Finished goods 35 50
     
Machinery and equipment    
Locally unavailable 
10 10
Food products, fertilizers, pharmaceutical products, pesticides which are locally unavailable, benefit from exemptions. 

Imported goods are also submitted to a sales tax of 15% except in case of a derogation. 

5.2. Special provisions : 

With regard to the description and codification of goods Pakistan applies, the general nomenclature stemming from the international convention on the harmonized system. 

The rules and rates of customs duties applicable on imported goods are specified in the "Pakistan customs tariff".

6. FOREIGN TRADE LOGISTIC : 

6.1. International Transports : 

In Pakistan, road transport means have almost the monopoly on manufactured goods forwarding : the road accounts of more than 80% of goods transport and the number of lorries is at present estimated at 110,000 units. 

The share of railway lines has tremendously diminished for the last few years ; but in the new five year plan it is considered as a priority sector. 

In the field of maritime transport, Pakistan owns two large merchant ports on the coasts of Oman sea : 

* Quasim port, specialized in loose goods, 

* and especially, Karachi port which alone, accounts for more than 75% of maritime traffic.

The National Company, Pakistan national shipping corporation owns a fleet composed of twenty ships and is provided with regular lines towards the main ports of America, Europe, the Middle and the Near-East. 

In the field of air-transport Pakistan is provided with three companies 

* Pakistan International Airline (PIA), which covers fifteen destinations at international level, 

* Aero-Asia, 

* and Shareen Airline.

It is also provided with 36 airports, three of which are the main Pakistani airports : Islamabad, Karachi and Lahore. 

6.2. Telecommunication : 

Pakistan telecommunication corporation (PTC) manages the basic telephone services and controls the two main constructors of telecommunications equipment. Nevertheless numerous licenses in this field were accorded to private companies, especially with regard to the installation and management of cellular networks. 

At international level, Pakistan is endowed with direct telephone connections with most of its trading partners. 

6.3. Distribution System : 

Some economic sectors, such as pharmaceutical industries, are provided with a well organized distribution network. On the other hand, in other sectors, distribution sectors are not easily controlled : in some cases, they are organized per zone, in other words, the distributor is entrusted with deliveries to the wholesalers and retailers of his distribution area. 

Other more important distributors have succeeded in setting up real distribution networks at national level ; it is the case among others of the United Distributors LTD.

7. USEFUL ADDRESSES  

ADMINISTRATIONS AND ORGANIZATIONS

ADDRESS

PHONE / FAX

Export Promotion Bureau 

Ministry of Commerce, Government of Pakistan
P.O. Box n° 1293, Block A Finance And Trade Centre, Share Faisal, Karachi Tel : (92.21) 568 14 48 
State Bank of Pakistan 11, Chundrigar Road, Karachi Tel : (92.21) 241 41 80
Federation of Pakistan Chambers of Commerce and Industries Federation House 

Shahrah -e- Firdousi, Main Clifton, Karachi
Tel : (92.21) 587 36 91 / 4



 
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