Commerce Ministry has decided to hold a detailed meeting with State Bank of Pakistan (SBP) to sort issues related to release of import consignments stuck at ports, as importers are bearing heavy demurrages, and foreign exchange is being pocketed by foreign shipping lines.
Briefing Senate Standing Committee on Commerce on Wednesday, Commerce Ministry shared the following reasons for containers stuck at parts: (i) restrictions imposed by SBP on opening of L/C and issuance of EIF, etc., for release of import consignments.
However, SBP has gradually allowed opening of L/Cs, etc., and EIFs; (ii) ban imposed by MoC on import or around 860 items in May, etc., which contributes around 2 per cent (YoY) of total imports.
The ban has been withdrawn from August 19, 2022 but causing anomaly by simultaneous imposition of penalty and new RDs on the banned items which has been resolved from October 19, 2022; (iii) some consignments are stuck due to non-compliance with the conditions/ restrictions contained in Import Policy Order, 2022; and (iv) floods in Sindh and Balochistan and the resultant damage to road infrastructure and non-availability of transport have also impacted on the movement of cargoes to upcountry from ports.
Responding to questions raised by Deputy Chairman Senate, Mirza Muhammad Afridi, and Senator Abdul Qadir, Secretary Commerce Sualeh Ahmad Farooqui informed the Committee that he will hold a detailed meeting with SBP in Karachi soon to resolve issues of import consignments as exports are also being effected due to raw materials stuck at ports.
Chairman Committee Senator Zeeshan Khanzada remarked that the policies of the State Bank with regards to import and dollar restriction have paralyzed trade and industry.
The committee lamented that the export figure and remittances are declining and industry is under a constant threat.
The Chairman Committee reiterated that the State Bank should review its policies in order to reinstate trade and industry.
The Committee maintained that a greater onus is on the Ministry of Commerce to take concrete steps to save trade and industry from falling apart. The Ministry of Commerce assured the committee that they have scheduled meetings with the SBP on relaxation of import restrictions and dollar limits. The committee inquired as to who was responsible for the demurrages due to non-clearance of LCs and urged that problems of traders be addressed.
The committee also inquired about the suspension of import of cars. While taking up the matter of gold imports, the committee was informed by the Ministry that State Bank has disallowed gold import; however, it can only be imported through schemes offered by the State Bank in the shape of remittances.
When asked about the resolution of the suspension of gold import, the Ministry said that the ‘gold association’ is willing to ensure that the entire channel be documented and declared and to legitimately deal with the applicable taxes.
Senator Abdul Qadir argued that the whole country is dominated by ‘mafias’ – in the petroleum, auto s and other sectors. He suggested that import of used cars be allowed so that local assemblers review their prices and improve quality.
The Chairman Committee inquired about the power energy concession regimes for industries which have export potential. It was suggested that export policies should be neutral. The power sector should give 100 percent concessionary benefits according to the amount of exports.
The Ministry stated that minute analytic work is being undertaken to provide concessionary regime for exporters. The committee directed to hold meetings with the SBP on policy reforms.
Secretary Commerce also stated that draft of Transit Trade with Kazakhstan will be finalised by December 15, 2022 (today). The pact will allow transit trade with Kazakhstan through Afghanistan, Iran and China.
The meeting was attended by Deputy Chairman Mirza Muhammad Afridi, Senator Mohammad Abdul Qadir, Senator Palwasha Muhammad Zai Khan, and Senator Fida Muhammad. Senior officials from the Ministry of Commerce and other attached departments were also in attendance.