Indian imports to flood Pak markets

Tag : cng plant

New trade policy sets $22.10bn exports target; imports to berestricted to $30bn; Mukhtar defends more trade with India

By Aftab Maken

ISLAMABAD: The PPP-led coalition government on Friday announced itsfirst trade policy, envisaging growth in exports by 15pc, cut inimports and emphasis on more trade with India.

The new trade policy sets the export target at $22.10 billion andlimits the countrys imports bill to $30 billion as compared withthe last years $39.97 billion. At the same time, the policy easesrestrictions on import of various items from India.

Federal Commerce Minister, Ch Ahmed Mukhtar announcing the tradepolicy on the state TV said, Cheaper raw material from India willmake Pakistans exports more competitive in the internationalmarket. The trade policy will allow the import of diesel and fueloil from India to also help address the growing trade deficit.

The government has decided to allow the import of machinery orequipment for mining, quarrying and grinding of minerals fromIndia, he said. In the new trade policy, importable items like CNGbuses, stainless steel, cotton yarn, academic, scientific andprofessional books, specialised printers, laminators and rollerswould be allowed from India.

The import of these items from India would also help address thetrade deficit, said the policy. In order to enhance exports ofminerals and rice, the new trade policy will also allow imports ofmining and paddy machinery from India.

The minister said if we look at the performance of various exportsectors in comparison with the available detailed figures for 11months from July 2007 to May 2008 during the same period of theprevious year, there was an overall increase of $1.755 billion.

The minister had earlier postponed his press briefing scheduled forSaturday on the direction of the prime minister in view of theprime ministers first TV address to the nation. However, he askedthe media men to attend the briefing soon after the PMs address.Later, briefing the journalists at the Prime Minister Secretariat,the minister emphasized the need for effective measures to arrestthe growing gap in trade deficit affecting the economy. Heattributed a number of unavoidable factors, which contributed tothe deficit gap to rise to $20.7 billion.

We inherited a very difficult economic situation where the publicis facing more hardships than it has in the recent history, hesaid. This was due to external and internal factors of the pastyear, he added. Moreover, the commerce minister said the doublingof international oil prices from around $68 per barrel to $145 perbarrel during the year and increase in international prices of fooditems Pakistan needed to import during the year, especially wheatand edible oil, enhanced the import bill.

The total imports during the year 2007-08 amounted to $39.97billion, raising the trade deficit of $20.7 billion, he added. Heemphasised the need for promotion of regional trade, whichaccording to him, was the only way to reduce freight and tradedeficit.

The new trade policy for 2008-09 enlarges the list of importableitems from India, which is based on the requests of stakeholders.The list will be issued separately later. About giving Most FavourNation (MFN) status to India, he said it did not suit Pakistan asIndia had technical and other trade barriers whereas Pakistan didnot have such restrictions.

When asked about R&D scheme for textile, the minister who also hasadditional charge of commerce & textile ministries said that hewould hold a meeting with the prime minister today (Saturday) andhopefully, the issue would be settled.

Imports measures: To any Indian manufacturer of CNG buses who makesa firm commitment to establish manufacturing unit of such buses inPakistan, the commerce ministry may provide special dispensationfor import of 10 buses by road via Wagah from each possibleinvestor as test consignment.

Under TR scheme, import of buses not more than 10 years old areallowed. This facility will help the returning overseas Pakistaniswith limited means to create an economic opportunity for themselvesas well as ease the shortage of such buses on inter-city routes.

Imports of used cryogenic containers/cylinders by industrialconsumers, cement trailers, without prime movers insecond-hand/used condition, prime movers with age limit of 5 yeasand minimum fleet requirement of 5 prime movers were also allowed.

In order to reduce the cost of raw material imports and therebymake the countrys indigenous export products more competitive, theimport of job lots and stock lots of raw material, which attractsduty up to 5pc would now be allowed.

Similarly, imports of old/used waste disposal trucks of municipalbodies (the imported trucks shall not be older than 10 years) willalso be allowed. Stainless steel and cotton yarn is importable fromIndia by train. In order to further reduce the cost of doingbusiness, it has been decided to allow their import by trucksthrough Wagah as well.

Import of academic, scientific and reference books, specialisedprinters, laminators and laminator rolls used for printing visastickers and passports by Nadra would be allowed from India. Onlyrecognised manufacturers would be allowed to import crude palm oilfor further processing and refining. Furthermore, manufacturers whoimport palm oil in crude form will not be allowed to sell it tonon-manufacturers. However, commercial importers who have investedin large bulk storages will be allowed to continue importing crudepalm oil subject to a safeguard mechanism to be drawn up by FBR.

Import of CFC-based compressors remains banned. The imports ofrollers would be allowed, but not more than 10 years old, and thecapacity should not exceed 12 tons. Export measures: As exportenhancing measures, the new trade policy suggests theintensification of market intelligence, trade promotion, enhancingcompetitiveness, coordination with other public departments,improving physical infrastructure, discouraging subsidies,diversification and encouraging quality.

Plant, machinery and equipment imported to set up a unit in DTREscheme will be exempt from duty and taxes. Import of inputs forDTRE will also be allowed from India, even if these are notincluded in the importable items from India, or manufacturedlocally.

To increase the exports of gem and jewellery and to encourageinvestment and remove all anti-export biases, gold, silver,platinum, palladium, diamond and precious stones would be exemptedfrom levy of customs duties and sales tax.

Exporters are allowed to send $25,000 worth of samples to foreignbuyers. Since automobiles have higher unit value therefore it hasnow been decided to increase the limit to $50,000 in the case ofautomobiles.

The TDAP with its revamping would also establish new clusters ofsurgical instruments, gloves and personal protective equipment,sports wear, leather & leather products in Sialkot and Charsadda,weaving and textile processing sector in Faisalabad, lightengineering sector in Gujranwala, auto parts in Lahore, ceramics inMultan and Halla, ajrak and bangles in Hyderabad/Halla andembroidery in Balochistan.

APP adds: Earlier, the federal cabinet in a special meeting withPrime Minister Syed Yousuf Raza Gilani in chair approved the ExportPolicy 2008-09 emphasising increase in countrys exports.

The cabinet also approved in principle the establishment of NFCUniversity of Engineering and Technology in Multan to cater forever-increasing demand for higher education of students of SouthernPunjab.

The prime minister had announced the up-gradation of the Instituteof Engineering and Technology Multan in May. Presently theInstitute of Engineering and Technology Multan is affiliated withBahauddin Zakriya University and is conducting B.Sc courses in thedisciplines of Chemical Engineering and Computer Engineering. TheHigher Education Commission recommended the up-gradation of theinstitute to the status of university level as a degree awardinginstitution.