Russia and Pakistan have initiated a barter trade system to overcome payment challenges resulting from international sanctions on Moscow. The new deal, agreed upon at the first Pakistan-Russia Trade and Investment Forum in Moscow, allows the two countries to exchange goods without monetary transactions, helping to sidestep complications caused by Western sanctions related to Russia’s invasion of Ukraine.
Under the terms of the agreement, Russia will export 20,000 tons of chickpeas to Pakistan in exchange for an equivalent amount of rice. Another deal includes the exchange of 15,000 tons of Russian chickpeas and 10,000 tons of lentils for 15,000 tons of Pakistani mandarins and 10,000 tons of potatoes. The first company to implement the barter system is Astarta-Agrotrading, a Russian agricultural firm, which will trade chickpeas and lentils with Pakistan’s Meskay & Femtee Trading Company, which will supply mandarins and rice.
Nasir Hamid, Pakistan’s deputy commerce minister, explained that the barter arrangement was necessary due to “difficulties with mutual payments.” The initiative allows both countries to bypass traditional financial transactions, which are under increasing scrutiny due to U.S. sanctions aimed at restricting trade flows that could support Russia’s war effort. The Biden administration’s secondary sanctions have led many foreign banks, including those in China, to halt cross-border settlements in Russian rubles or Chinese yuan, further complicating trade.
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