Pakistan's record gold exports set to suffer after government moves to curb outflows to India — analysts
On May 6, the government enforced a 60-day ban on the import and export of precious metals, jewelry and gemstones to stabilize its foreign exchange reserves, just one day before India attacked Pakistan.
The deadly escalation followed an attack in Indian-administered Kashmir on April 22 that killed 26 tourists, which New Delhi blamed on Pakistan despite Islamabad's denial of any involvement.
Nearly two weeks after the incident, the nuclear-armed neighbors exchanged ballistic missiles and artillery fire after India targeted what it called 'terrorist infrastructure' inside Pakistan.
Gold remains a traditional store of value in the country, which primarily sources its imports of the metal from the United Arab Emirates, Switzerland, Turkiye and other major gold-trading global centers.
'This ban is expected to be lifted,' Ahsan Mehanti, the Chief Executive Officer at Arif Habib Commodities Ltd, told Arab News. 'However, it is negatively impacting the country's gold exports that were increasing to a record level.'
According to the Pakistan Bureau of Statistics, the country's jewelry exports rose by 58 percent to Rs3 billion ($11 million) in March this year, matching the total for the entire previous year.
'This 58 percent surge is a record,' Mehanti said, adding the ban will have a short-term impact on gold exports this year, which are bound to increase later when the ban is lifted in July.
'The ban was imposed when the [Pakistan-India] border tensions started intensifying,' he continued. 'This military escalation could have led to an increase in the circulation and prices of gold in Pakistan, but no such thing happened because of the government's ban.'
He maintained the ban helped the gold market avoid speculative trading that kept the prices in check.
Mehanti said since international gold prices have declined on the back of the US-China trade war's settlement, 'we expect the surge [in Pakistan's gold exports] to be higher than the previous record surge of 58 percent.'
Pakistan's Dawn newspaper reported on May 8 the export curb aimed to limit the flow of gold and other precious metals to India via Dubai, citing unnamed government officials.
It added the ban was also intended to restrict the outflow of dollars from the cash-strapped country, which has spent over $28 million on importing 368 kilograms of gold so far this year.
However, the commerce ministry spokesperson, Muhammad Ashraf, denied the ban had any 'relevance to the Pak-India conflict.'
A member of the managing board of Karachi Sarafa & Jewellers Group, M. Iqbal, said Pakistan's gold market was linked to the international gold market, which is mainly driven by the dollar.
'Gold would take a hit when the United States faces an issue like what we saw during the US-China tariffs war,' he explained.
The cash-strapped country also exported $4.1 million worth of gems in the first nine months of FY25 ending in June.
Prime Minister Shehbaz Sharif's administration is relying mainly on the International Monetary Fund's (IMF) $7 billion loan program to keep debt-ridden Pakistan's balance of payments in check, as exports have grown only six percent this year while foreign direct investment has remained stagnant for decades.
The government has incentivized jewelry exporters through duty drawbacks and zero-rating for specific inputs, which helped the country's jewelry exports rise 43 percent last year.
Gold prices in Pakistan hit a record high late last month but have been declining since the US and China resolved their trade tariff dispute.
On Tuesday, 12 grams of the yellow metal were priced at $1,222 (Rs344,200).
In 2023, Pakistan relaxed several gold import regulations to promote transparency, minimize smuggling and establish computerized customs valuation and tracking systems.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Arab News
24 minutes ago
- Arab News
Pakistan prequalifies four investors for PIA, greenlights Roosevelt Hotel joint venture deal
KARACHI: Pakistan has prequalified four investors for the sale of Pakistan International Airlines (PIA), while its Cabinet Committee on Privatization (CCOP) has approved the transaction structure for the denationalization of the Roosevelt Hotel in New York under a joint venture, the ministry of privatization said on Tuesday. Pakistan has been seeking to sell a 51-100 percent stake in the struggling national airline to raise funds and reform cash-draining, state-owned enterprises as envisaged under a $7 billion International Monetary Fund program. It would be the country's first major privatization in nearly two decades. Among the bidding groups, one is a consortium of major industrial firms Lucky Cement, Hub Power Holdings, Kohat Cement and Metro Ventures. Another is led by investment firm Arif Habib Corp. and includes fertilizer producer Fatima Fertilizer, private education operator The City School, and real estate firm Lake City Holdings. Additionally, Fauji Fertilizer Company, a military-backed conglomerate, and Pakistani airline Airblue, have been approved to bid for PIA. 'The prequalified parties will now proceed to the buy-side due diligence phase — a critical next step in the transparent and competitive privatization process of PIACL,' the privatization commission's statement said. PIA, once a respected carrier in Asia, has been propped up by taxpayers for decades due to political interference, corruption and inefficiencies. The airline's privatization has repeatedly collapsed amid union resistance, legal hurdles and low investor appetite. Pakistani state-owned enterprises post annual losses of more than Rs800 billion ($2.87 billion), and when subsidies, grants and other support are included, the burden swells beyond Rs1 trillion ($3.59 billion), Finance Minister Muhammad Aurangzeb told parliament while presenting the budget for fiscal year 2025–26 earlier this month. PIA has been one of the government's most costly liabilities, which has accumulated over $2.5 billion in losses in roughly a decade and been surviving on repeated bailouts that have weighed heavily on Pakistan's strained budget. Last month, five consortiums submitted expressions of interest for a 51–100 percent stake in PIA after the government restructured its balance sheet to make the deal more attractive. It also scrapped the sales tax on leased aircraft and is providing limited protection from legal and tax claims. Around 80 percent of the airline's debt has been transferred to the state. ROOSEVELT HOTEL Separately, the CCOP approved the transaction structure for Roosevelt Hotel under a 'Joint Venture model with multiple options.' 'This option is aimed at maximizing long-term value for the country, while ensuring flexibility, multiple exit opportunities, and minimizing future fiscal exposure,' the privatization commission said. How much money the hotel ultimately brings in, and its overall valuation, depends on the type of transaction structure adopted, Privatization Commission Chairman Muhammad Ali told Arab News in an interview last month. If the government formed a joint venture with a private investor, sharing both the risks and future profits, the hotel could be worth four to five times more than its as-is valuation, he said at the time. 'So, depending on what sort of structure you have, how much risk you take, how much effort the government puts in, we can make a lot of money from this asset,' the privatization chief had said. The Roosevelt, a 1,015-room historic hotel in Midtown Manhattan, has long been one of Pakistan's most prominent but politically sensitive overseas assets. Acquired by Pakistan International Airlines Investment Limited (PIAIL) in 1979, the hotel occupies a full city block on Madison Avenue and 45th Street. Over the past two decades, successive Pakistani governments have floated plans to sell, lease, or redevelop the property, but no proposal has advanced beyond early-stage planning. Operations at the Roosevelt were suspended in 2020 following steep financial losses during the COVID-19 pandemic. In 2023, Pakistan entered a short-term lease with the City of New York to use the property as a temporary shelter for asylum seekers, generating more than $220 million in projected rental income. That agreement ended in 2024 and no new revenue stream has since been announced. The Roosevelt Hotel is one of several state assets the government hopes will contribute to its target of raising Rs86 billion ($306 million) in privatization proceeds during the fiscal year starting July 1, alongside the sale of PIA and three electricity distribution companies.
Arab News
2 hours ago
- Arab News
Pakistani Internet regulator, Meta join forces to tackle militancy in digital sphere
ISLAMABAD: The Pakistan Telecommunication Authority (PTA) and Meta have organized a high-level workshop, titled 'Counter-Terrorism in the Digital Age,' the PTA said on Tuesday, aiming to ensure safe use on online spaces. The event brought together experts from Facebook, Instagram and WhatsApp along with representatives from key Pakistani government institutions and law enforcement agencies (LEAs). The workshop focused on Meta's evolving policies for tackling militancy-related content and enhancing cooperation between digital platforms, LEAs and regulators, according to the PTA. 'Collaboration with global platforms like Meta is vital to prevent the misuse of online spaces by extremist elements,' PTA Chairman Hafeez-ur-Rehman said, reaffirming the PTA's commitment to building a safer digital environment. The development comes amid a surge in militancy in Pakistan's western regions by religiously motivated groups like the Pakistani Taliban and Daesh as well as ethno-nationalist Baloch separatist groups. Pakistani officials have in the past said that these militant groups also used social media platforms to 'brainwash' and 'recruit' people, including women, in their ranks to carry out attacks. Militant attacks in Pakistan more than doubled from 517 in 2023 to 1,099 in 2024. Tuesday's workshop was part of the PTA's broader strategy to promote responsible online behavior and enhance national digital resilience, at which the participants discussed various mechanisms for complaint handling and content escalation, and engaged with Meta's policy specialists on various topics. 'Joint efforts like this are key to creating safer digital spaces while upholding community standards and fundamental rights,' Meta's Dangerous Organizations and Individuals (DOI) Policy lead Dr. Nawab Osman said.
Arab News
2 hours ago
- Arab News
Pakistan court orders YouTube to block channels of ex-PM Imran Khan, journalists
KARACHI: A number of Pakistani journalists said on Tuesday they received notifications from YouTube, citing a court order from Islamabad directing the blocking of their channels, along with those of jailed former Prime Minister Imran Khan and his Pakistan Tehreek-e-Insaf (PTI) party. According to notices seen by Arab News, the US-based video-sharing platform said it had received a legal removal request referencing a court order dated June 24, 2025, in Enquiry No. 717/2025. The list of affected channels includes those of senior journalists Matiullah Jan, Habib Akram, Sabir Shakir, Asad Ali Toor, Ahmed Noorani and at least 20 others, alongside Khan's and PTI's official YouTube channels. Zulfi Bukhari, a close aide to Khan, told Arab News by phone that PTI's channels had not yet received any formal notification. However, several journalists confirmed receiving takedown notices via YouTube and vowed to challenge the court's directive. 'I am in contact with fellow journalists whose channels have been served with similar notices, and we intend to challenge this in court,' said Habib Akram, a Lahore-based anchor and political commentator, adding the order had been issued without any prior notice or summons from the Islamabad court. 'The decision appears to lack any clear legal basis and seems to be an apparent attempt to suppress independent journalism,' he added. The order, issued by Judicial Magistrate Abbas Shah in Islamabad, instructed YouTube's parent company, Google LLC, to block 27 channels for allegedly violating Pakistan's Prevention of Electronic Crimes Act and other penal laws. 'You may choose to act on the said content in term of the aforesaid court order,' read a notice issued by YouTube. 'If you fail to do so, as per our local law obligation, we may comply with the request without further notice to you.' Asad Ali Toor, a journalist based in Islamabad whose name appears on the list, criticized both the court and the National Cyber Crime Investigation Agency (NCCIA) for acting without giving him a chance to be heard. 'For the past three months, NCCIA has also frozen my and my family's bank accounts without any hearing,' he said. Toor attributed such actions to his 'critical reporting' on sensitive issues like enforced disappearances and institutional overreach. He said he had previously received notices about specific videos, but this was the first time his entire channel had been targeted. Matiullah Jan voiced concern about the broader implications of the move. 'I believe YouTube should not block any channel solely on the basis of an inquiry without a court order,' he said. 'If this becomes a norm, it could set a dangerous precedent globally.' Despite multiple requests, the Ministries of Interior and Information & Broadcasting did not respond to Arab News queries seeking clarification on the government's role in the matter or the legal grounds for the request to YouTube. The court order referenced by YouTube states that during an inquiry under Section 94 of the Criminal Procedure Code, 'evidence regarding YouTube channels' was deemed necessary, and their content constituted offenses under Pakistan's cybercrime laws. Digital rights groups and press freedom watchdogs have frequently criticized the Pakistani government for using vague legal provisions to stifle dissent. In its 2024 report, Reporters Without Borders (RSF) ranked Pakistan 152nd out of 180 countries on the World Press Freedom Index, citing growing censorship, legal harassment of journalists, and tightening control over digital platforms. Journalists now fear the court-backed move could deepen digital censorship in the country. 'We are not only being silenced, but also criminalized for doing our job,' said Toor. 'This is not just about YouTube. It's about the future of press freedom in Pakistan.'
