Prime Minister Approves Khunjerab Border Trade Tax Exemptions, Directs FBR for Implementation

This marks a major policy breakthrough following the 68-day-long sit-in at the Pak-China border town of Sost which was concluded on 27th September 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. Protesters had raised serious concerns over customs procedures, tax exemptions, trader quotas, and what they described as arbitrary enforcement measures that were crippling cross-border trade at Pakistan’s only land port with China.

According to an official notification issued by the Prime Minister’s Office on 23 December 2025, the Prime Minister has endorsed the committee’s recommendations contained in paragraph 17 of its report. The Federal Board of Revenue (FBR) has been directed to implement these recommendations and submit a compliance report to the Prime Minister’s Office within seven days.

The committee’s recommendations, now approved at the highest level, outline a comprehensive framework to regulate imports through the Silk Route Dry Port (SRDP) at Sost while safeguarding the economic interests of Gilgit-Baltistan. These include a trader-centric quota allocation system, categorisation of businesses, special concessions for youth and women-led enterprises, and a district-based institutional mechanism to prevent smuggling and misuse of exemptions.

Under the approved framework, import quotas are to be allocated transparently through a registration and verification process, supported by a dedicated traders’ portal. The policy also introduces a multi-stage monitoring system involving customs, district administrations, and law enforcement agencies to ensure that tax-exempt goods are consumed within Gilgit-Baltistan and not diverted to other parts of the country.

The framework further recommends the establishment of district enforcement and monitoring committees, on-ground monitoring offices, and periodic audits to enhance transparency and accountability. Infrastructure improvements at Sost, including scanning facilities, sanitation, and border management equipment, have also been proposed to ensure smoother trade operations.

Local traders and civil society groups have termed the Prime Minister’s approval a “landmark development,” noting that it validates months of peaceful protest and dialogue. They expressed hope that timely implementation by the FBR would restore confidence, revive cross-border trade with China, and stabilise livelihoods dependent on the Sost Dry Port.