The government intends to exempt the Gwadar Free Zone (GFZ) from the Import and Export Order and the Foreign Exchange Regulations Act. This initiative is part of the preparations for a pilot project involving RMB currency exemption, according to sources familiar with the Minister for Planning, Development, and Special Initiatives.
Under the China-Pakistan Economic Corridor (CPEC) Coordination and Implementation Committee (CCoCIP), led by Minister Ahsan Iqbal, various proposals are being considered to create independent markets and facilitate investments.
Important Decisions and Proposals
Electricity Supply to Rashakai SEZ: The CCoCIP was briefed about the outstanding distribution licenses for electricity at the Rashakai Special Economic Zone since November 2022. It instructed the Power Division to make necessary policy decisions to ensure the immediate supply of electricity within the zone’s internal network.
For the Gwadar Free Zone, the CCoCIP discussed potential exemptions from the Export Policy Order to enhance its appeal for exports. This is crucial for investors, such as those involved in the potassium sulfate fertilizer plant, who currently face restrictions on exporting their products due to existing regulations.
Transit Trade Policy: The Ministry of Commerce has introduced a new policy mandating a bank guarantee for Afghan transit trade. Consequently, the CCoCIP needed to reassess this policy to facilitate bulk cargo imports through Gwadar Port. There was a request for the ministry to replace bank guarantees with insurance guarantees to streamline transactions.
International Seafood Transshipment: The China Overseas Port Holding Company (COPHC) has been authorized to manage international seafood transshipments at Gwadar Port. Consultation with the provincial government was emphasized due to the contentious issues surrounding fishing in Balochistan.
Karachi Coastal Comprehensive Development Zone (KCCDZ): Updates were provided regarding the Investment Framework Agreement signed with the China Port and Bridge Corporation. The forum highlighted the necessity for provincial government consultations on reclaimed coastal land matters.
RMB Currency Exemption: COPHC proposed a pilot project to implement RMB currency exemptions for export-oriented businesses in the GFZ to attract foreign investment. The CCoCIP directed the Ministry of Maritime Affairs to gather feedback from relevant stakeholders before the next meeting.
Security for Chinese Nationals: In response to security concerns raised by Chinese nationals working on projects in Pakistan, the CCoCIP requested the Interior Division to review standard operating procedures (SOPs).
Next Steps
The forum has instructed the relevant ministries to provide comprehensive summaries with recommendations for consideration at the next CCoCIP meeting, ensuring proper consultation with all stakeholders. Additionally, the CPEC Secretariat will compile these proposals to ensure they are comprehensive and actionable.
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