68-Day Sit-In Ends at Sost as Supreme Council Leaders Term Agreement a Landmark Achievement
Sost, 27 September: The 68-day-long sit-in at the Pak-China border town of Sost concluded in the early hours of Saturday after members of the Gilgit-Baltistan Supreme Council and the Tajir Ittehad Action Committee returned from Islamabad and briefed protesting traders on the terms of their agreement with the federal government.
The sit-in began on 21 July when traders pressed for two long-standing demands: tax exemptions for GB traders on imports from China due to its special constitutional status and the clearance of containers stuck at the dry port. Similar protests had been staged in the past on the same agenda, but this action was the longest and most disruptive, paralysing cross-border trade with China and leaving hundreds of consignments stranded.
Also Read: Protest in Sost Enters Second Month; Police Step Back After Night of Unrest
The Pak-China border town of Sost witnessed a night of high tension as police and Frontier Constabulary (FC) attempted to disperse protesting traders, leading to tear gas shelling, aerial firing, stone-pelting, and unrest in the area.
Supreme Council Briefs Protesters in Sost
Addressing a gathering of traders and residents in Sost, Supreme Council members announced that Gilgit-Baltistan had effectively been recognised as a non-tariff area, with the federal government agreeing to abolish sales tax, income tax, and federal excise duty on imports meant for local consumption.
Kausar Hussain told the audience that taxes imposed 43 years ago in 1982, following the extension of the Customs Act to GB, had finally been rolled back. He termed it “a success achieved through unity and persistence” and explained that relief for hundreds of stuck containers was included in the settlement. Clearance would begin under an amnesty scheme announced by the Prime Minister, starting Monday.
Kamran Ghazi, another member of the negotiating team, outlined the four-point agenda pursued in Islamabad: tax exemptions, amnesty for stuck consignments, establishment of export facilities, and allocation of funds for border area development. He said the federal government had agreed to allocate a portion of collections for Gojal through the Federal Finance Division, to be reflected in the provincial budget.
Ghazi clarified that while sales tax, income tax, and excise duty had been removed, regulatory duty remained under the Customs Act. “There is a legal provision under Section 5(19) of the Act for exemptions, and efforts will continue in the coming months to pursue this through legislative channels,” he said.
He added that a special tariff line covering 5,500 items had been approved for GB imports. Goods imported for local consumption could be sold freely within GB but not directly transported for resale outside the region. Raw materials and alcohol were excluded to prevent misuse, with tariff lines subject to revision as industries develop.
Ghazi also announced the creation of a coordination committee to liaise with the State Bank, quarantine, and standards authorities to set up facilities at Sost and facilitate exports.
Ashfaq Ahmed, President of the Gilgit Chamber of Commerce, urged unity and warned against attempts to create confusion about the settlement, stressing that the achievement was made possible by unprecedented unity among GB’s political, social, and business leadership.
Also Watch: Supreme Council Hails Border Trade Tax Deal as Historic, Declares Gilgit-Baltistan a Non-Tariff Area
GB Special Committee and Federal Negotiations
During the sit-in, the GB government initially set up a committee headed by Senior Minister Ghulam Muhammad. Later, on 4 September, the Chief Minister constituted another special committee under the chairmanship of Home Minister Shams Lone, which included former CM Hafiz Hafeezur Rehman, MPA Amjad Hussain Advocate, Minister Eng. Muhammad Anwar, and members Rehmat Khaliq, Ayub Waziri, Wazir Muhammad Saleem, and Muhammad Ali Quaid.
The committee rejected two federal options—tax collection with reimbursement and quota-based exemptions—as unconstitutional, since the Sales Tax Act 1990 and the Income Tax Ordinance 2001 had not been extended to GB. Instead, it recommended that all goods imported exclusively for local consumption be treated as tax-free under SRO 1193 of 2024, that a joint clearance desk staffed by GB and federal officials be established, that strict enforcement measures be applied against smuggling, and that the Prime Minister’s amnesty scheme be operationalised to clear stuck consignments.
Read the Recommendations of the GB Special Committe
The GB Cabinet endorsed these proposals and forwarded them to the federal committee formed by Prime Minister Shehbaz Sharif on 17 August. The federal committee, chaired by Awais Ahmed Khan Leghari and including Senator Saleem Mandviwalla, Amir Muqam, and Rana Sana Ullah Khan, held negotiations with trader representatives in Islamabad.
On 23 September, a consensus was reached. At a press conference, Leghari, flanked by GB Chief Minister Haji Gulbar Khan and trade representatives, announced tax exemptions for GB, relief for stuck consignments, and development allocations. The agreement was signed by federal ministers and Senator Mandviwalla on behalf of the federal government, while Chief Minister Gulbar Khan, former CM Hafeezur Rehman, and MPA Amjad Hussain signed for the GB government. The Traders Supreme Council was represented by Ashfaq Ahmed, Kamran Ghazi, Gulsher Khan, Saleem Uddin, and others.
Read the Original Draft of the Agreement
Although the Chamber of Commerce president urged traders to end the sit-in after the Islamabad announcement, frontline leaders in Sost insisted the negotiators return and explain the agreement. The sit-in therefore continued until the evening of 26 September, when the negotiators addressed traders in Sost.
While most trade leaders welcomed the announcement, the absence of Javed Hussain, a former assembly member and frontline leader of the sit-in, was noted. His absence fuelled speculation of disagreements within the leadership over the terms of the settlement and the timing of calling off the protest. In earlier interviews, Hussain had cautioned that the agreement did not fully reflect the charter of demands in spirit.
Also Watch: Tajir Ittehad and Supreme Council Call Off Sost Sit-In After Successful Talks with Federal Government
Significance, Challenges, and Risks
The deal is widely being hailed as a first step towards a new era of socio-economic transformation in Gilgit-Baltistan. The recognition of GB as a non-tariff area removes a major structural barrier to trade and is expected to re-energise commerce across the Khunjerab Pass. Yet the path ahead is fraught with challenges.
-
Implementation risk: Translating the agreement into smooth customs operations, quotas, monitoring systems, and timely clearances will test institutional capacity and political will.
-
Quota cap tension: Some residents rejected the agreement’s annual cap of Rs 4 billion, arguing it constrains trade potential and could fuel future protests.
-
Regulatory duty (RD) issue: RD has not yet been exempted. Negotiators will push for legal reforms to cover RD under exemptions, but this may face federal resistance.
-
Risk of misuse or smuggling: Strong safeguards will be needed to prevent exempted goods being diverted outside GB, which would undermine the agreement and invite retaliation.
-
Revenue sharing for border development: The mechanism to channel development funding from FBR’s collections and federal allocations must be made clear and consistent.
-
Dependence on federal grants: GB remains almost entirely dependent on federal grants. Without a sustainable revenue-sharing mechanism, the provincial government will lack the financial base for long-term development.
Pak-China Border and Trade Ties
The settlement comes against the backdrop of long-standing Pak-China cooperation at the Khunjerab border. The Pakistan–China border, stretching about 523 kilometres, was formally delimited in 1963, laying the foundation for modern relations. The barter trade regime between GB and Xinjiang continued until the 1982 Pak-China Trade Agreement, under which Pakistan extended the Customs Act to GB, introducing federal taxes for the first time.
The Karakoram Highway (KKH), jointly built by Pakistan and China, was officially opened for trade in 1978, becoming the primary artery for bilateral commerce. These agreements and infrastructure projects cemented GB’s role as Pakistan’s gateway to China.
Today, as the sit-in ends and trade resumes, the Sost Dry Port once again becomes the focal point of regional commerce—its future trajectory closely tied to how faithfully the new agreement is implemented and how effectively it strengthens cross-border trade and people-to-people ties.
