Pakistan offers zero tariff bilateral trade deal to US

ISLAMABAD: In a major development, Pakistan has offered zero tariff bilateral trade agreement to the United States. “Pakistan is offering to enter into a bilateral agreement with zero tariffs on selected tariff lines, with mutual interests, to expand bilateral trade across multiple sectors,” said a high-level source when asked about the new policy offered to the US.

The development comes after US President Trump brokered a ceasefire between Pakistan and India.

In a follow-on post after the ceasefire, Trump lauded the leadership of both countries and said he would be doing ‘a lot of trade’ with both.

US President Donald Trump Thursday said India had offered a trade deal proposing “no tariffs” for American goods, while expressing dissatisfaction with Apple’s (AAPL.O) plans to invest in India.

New Delhi is seeking to clinch a trade deal with the US within the 90-day pause announced by Trump on April 9 on tariff hikes for major trading partners. “It is very hard to sell in India, and they are offering us a deal where basically they are willing to literally charge us no tariffs,” Trump said in a meeting with executives in the Qatari capital Doha.

Reuters reports that New Delhi has offered zero duties on 60% of tariff lines in a first phase of the deal under negotiation with Washington, while offering preferential access to nearly 90% of the merchandise India imports from the US.

India’s equity benchmarks jumped to a seven-month high after Trump’s comment on deal with India.

Trump in Doha said he had confronted Apple’s CEO Tim Cook about shifting production to India, as the American company moves to make most of its iPhones sold in the US at factories in India by the end of 2026 and is speeding up those plans to navigate potentially higher tariffs in China. “Tim, we treated you very good; we put up with all the plants you built in China for years... we are not interested in you building in India; India can take care of themselves; they are doing very well; we want you to build here”, Trump recalled himself telling Cook, who was not in the Doha meeting.

India’s Prime Minister Narendra Modi has in recent years promoted India as a smartphone manufacturing hub and Apple’s suppliers have ramped up production in the country. In March, Apple’s main India suppliers Foxconn and Tata shipped nearly $2 billion worth of iPhones to the US, an all-time high, to bypass Trump’s impending tariffs.

Mehtab Haider adds: With the replacement of its Mission Chief, the IMF team has kick-started virtual parleys from Turkey with Pakistani authorities to finalise the upcoming budget, terming the revenues underestimated and expenditures overestimated for 2025-26. Ms. Eva Jenkner, the newly appointed Mission Chief, seemed quite tough for the budget makers and raised key questions about forecasting revenues and expenditures.

Minister for Finance Mohammad Aurangzeb, along with his team from the Ministry of Finance, kicked off a meeting with the IMF in Islamabad on Thursday noon. The IMF has so far rejected the FBR’s proposal to bring down tax rates for the salaried class and asked the FBR to develop a new chart of decreasing tax rates for the middle-income earners.

On property, different proposals are under consideration to bring down transactional Withholding Taxes by 1 percent but raise the tax rates of Capital Gains Tax (CGT) from 15 to 20 percent in the upcoming budget. The IMF had already agreed to abolish the Federal Excise Duty (FED) in the next budget. The IMF has changed the guard and replaced its Mission Chief Nathan Porte with Ms. Eva Jenkner.

Interestingly, on the request of the Ministry of Finance, the IMF team changed the venue of the zoom meeting from Washington, DC to Turkey, keeping in view a closer time zone.

On revenue estimates, the IMF did raise the basic questions and estimated that the FBR revenues could go up to Rs14.4 trillion for the next budget, but the FBR pitched its projection of revenues in the range of Rs14.1 trillion for the next fiscal year.