Islamabad, Pakistan – ACT Alliance Pakistan has expressed grave concern over the unchecked spread of “Baarra Markets” in major cities, where smuggled goods from Iran and Afghanistan are openly sold in defiance of Pakistani law. These markets operate in plain sight of tax authorities and local administrations, sending a damaging signal of impunity.
In a statement issued today, Mubashir Akram, Country Director, ACT Alliance Pakistan, said that these markets in Rawalpindi, Peshawar, Lahore, Karachi, and Quetta have become “one of the most visible faces of Pakistan’s illegal trade crisis” and a symbol of weak enforcement. “From cheese, jams, coffees and beverages to cosmetics, tea and illegal cigarettes, virtually every category of smuggled product is available in these bazaars, while the state looks away,” he said.
The Pakistan Business Council (PBC) estimates that the combined value of smuggling, under-invoicing, mis-declaration, counterfeiting, and adulteration is around $68 billion, equal to 20 percent of Pakistan’s formal economy. It further estimates that the annual loss of tax revenue due to illegal trade is roughly 8 trillion rupees, or about 85 percent of the federal tax target for FY24.
“If the government is losing 8 trillion rupees a year, then markets that openly trade in smuggled food, beverages, and cigarettes cannot be dismissed as a side issue,” Mubashir Akram said.
The PBC framework on illegal trade also notes that around 40 percent of goods sold through undocumented wholesale and retail outlets are illegal, mainly smuggled, counterfeited, or adulterated. It explicitly lists tea, cosmetics, toiletries, food items, auto parts, domestic appliances, cloth, cigarettes, medicines, tires, petroleum products, and betel leaves among the most vulnerable product categories. The Council further warns that misuse of Afghan transit trade and diversion of goods from Iran are key channels feeding smuggling into Pakistan’s urban centers.
ACT Alliance Pakistan urged the Federal Board of Revenue and the federal and provincial governments to launch a coordinated crackdown on these markets, using the “whole-of-government” approach recommended by the Pakistan Business Council. “There must be visible raids, confiscation and destruction of smuggled stock, and exemplary penalties for transporters, wholesalers and retailers dealing in these goods,” Mubashir Akram said. “Provincial governments, in particular, need to treat the sale of smuggled items in their jurisdictions as a direct attack on their own development budgets.”
“Pakistan cannot afford to keep its city centers as open showcases of smuggling,” he concluded. “Cleaning up the Baarra Markets is a test case of whether we are serious about the rule of law, fair competition, and protecting our economy from collapse.”