Pakistan has reopened imports of full range of goods by removing restrictions imposed on import of 826 items from time to time between 2017 and 2022. The major items freed from import restrictions include raw material for cement and steel, vehicle parts, confectioneries, chocolate, mineral water, cigarette paper, electrical and electronic goods and some machinery and parts. According to a circular of the State Bank of Pakistan (SBP), the bank has removed condition of depositing up to 100% payment in advance for import of hundreds of items.
This certainly is a welcome step in right direction and will be taken positively by business community, which was faced with many difficulties including shortage of raw material, machinery and other inputs due to these restrictions. Owing to shortage of raw material and equipment industries such as auto and textile was shutting down and rendering hundreds of thousands of people jobless. Lahore Chamber of Commerce and Industry while appreciating SBP’s decision said they were experiencing shortage of funds due to condition of hundred percent cash margin yet now the situation will take a positive turn. We believe this ease of doing business step will help industries to revive their operations and its positive impact will also be seen on our exports. There is no denying that our foreign exchange reserves are not in a comfortable position and only sufficient to meet import requirements of about a month but restrictions on imports were also impacting export oriented industry. Hence it was really important to support this industry to earn valuable foreign exchange.
With the removal of cash margin requirement, government has also fulfilled yet another condition of the IMF. We are confident that staff level agreement with the lender will also unlock inflows from some friendly countries that will put our foreign exchange reserves at some reasonable level. Time has come to go for import substitution in order to reduce dependence of our industries on imported material. By extending incentives and facilitation to private sector, this task can be achieved that will help the country to effectively deal with the issue of balance of payment.
