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    Pakistan removes Import Trade Price on Sri Lankan MDF Boards

    February 04, 2016

    The Sri Lanka-Pakistan talks held in November 2014 has resulted in a new trade concession for Lankan exporters and boosted bilateral trade between both countries.

    The first relief as a result of post-November talks is the removal of Import Trade Price slapped by Pakistan on Medium Density Fiberboard (MDF Board) exported from Sri Lanka to Pakistan.

    Medium Density Fiberboard (MDF Board) is one of the major exporting products to Pakistan from Sri Lanka. It represents nearly 10% of Sri Lanka’s total exports to Pakistan and Sri Lanka is the second largest supplier of MDF to Pakistan after Malaysia as Sri Lankan exporters have been enjoying the duty free market access under the Pakistan – Sri Lanka Free Trade Agreement (PSFTA).

    However, Pakistani authorities placed a valuation rule (the minimum value) for all MDF Board imports as “Import Trade Price (ITP)” in order to eliminate the under-invoicing. Initially, the valuation rule applied across the board to all countries and later the Pakistani authorities introduced a new valuation rule which discriminates Sri Lanka from other exporting countries.


    At the bilateral discussion, during the visit of Federal Minister of Commerce of Pakistan in November 2015, Minister Rishad Bathiudeen along with Department of Commerce raised this issue with Pakistan delegation as this is injurious and hindering Sri Lanka’s exports to Pakistan. This was further discussed at the recently concluded Commerce Secretary Level Meeting of PSFTA between Sri Lanka and Pakistan.

    Ministry of Industry & Commerce and the Department of Commerce made several interventions through Consulate General of Sri Lanka in Karachi to the respective Pakistani authorities for early settlement of this issue due to serious injury to the Sri Lankan MDF manufacturing industry as Pakistan is one of the major buyers of MDF Boards from Sri Lanka besides India.

    After considering the appeal made by Sri Lankan authorities, the Pakistan government amended the valuation ruling effective from 29th January 2016 which treat Sri Lankan originating MDF Boards in par with other exporting countries. This move has been welcomed by Sri Lankan exporters as it would lead to enhance bilateral trade relations of both countries as well as facilitate achieving 20 billion exports target of Sri Lankan Government by 2020.

    The 11th session of Sri Lanka – Pakistan Joint Economic Commission was held in Colombo on 27 November. Minister Bathiudeen, addressing the openings session of the Commission, said: “The business communities, of both the countries need to play a vital role in this process. This would of course, demands the business entrepreneurs of the two countries to engage themselves in vibrant and vigorous trade and investment promotional activities”. Pakistan is the second largest trading partner of Sri Lanka in the SAARC region after India. The YoY bilateral trade has increased by 6% in 2012 to $ 433.69 Mn. A substantial growth in bilateral trade is seen in both exports and imports, especially after Free Trade Agreement between the two countries was implemented in 2005. The value of total trade between the two countries has increased by 174% from US $ 158 Mn in 2005 to US $. 433.69 Mn in 2012.

    Last modified on Wednesday, 03 February 2016 22:09

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