Pakistan to get $8 Billion investment from Russia after resolving 40 years old trading clash.
Eventually, Pakistan and Russia agreed to settle a four-decade-old trade conflict, the latter promising to invest 1,249,948,000,000.00 Pkr.
During 80’s, some companies in USSR were introducing textile products from Pakistan. For easing the trade process, USSR opened two bank accounts in the National Bank of Pakistan (NBP).
The Economic Affairs Division (EAD) deposited funds in these bank accounts through the State Bank of Pakistan (SBP). After the downfall of the USSR, frequent exporters were unpaid. The Pakistani companies demanded to have paid large sea freight fees for the unshipped goods.
The exporters and Pakistani companies had to move their argument to Sindh High Court (SHC). SHC issued a stay order, which stopped NBP from transferring $104.93 million to Russian banks.
Since then, any attempt between the two countries to resolve the issue has been in vain.
Both countries started a discussion at the 3rd Pakistan-Russia Inter-Governmental Commission meeting in November, 2015. Both governments reached an agreement that Islamabad will return $93.5 million in 90 days after officially signing the agreement.
Chairperson of Board of Investment discussed a deal with the exporters in October 2016. However, the Pakistani companies never take out their petitions from the Sindh High Court. As a result, the agreement was never officially signed.
In 2017, the Pakistani companies reached an agreement with the government and withdrew their cases from court. This involved Tabani Group, Mercury Group, ABS Group, Fateh Industries/Fateh Sports and Fateh Jeans.
Sindh High Court dismissed the case on October 4th, 2019, as the parties involved in the session got an out of court contract, flagging the way for the agreement to be officially signed.
The representative of Pakistan on behalf of Pakistani government will sign the agreement.
Further, down the agreement exporters and companies will receive $23.8 million as agreed.
Afterward this agreement, Russia will go ahead with its plan of investing $8 billion in different energy projects and Pakistan Steel Mills. Russia was not capable to invest in Pakistan during the argument since Russian laws prohibit investment in countries with pending disputes.