federal cabinet on Thursday banned the import of about 41 items for two months to stave off an impending default, but the measure seems too small as it will keep import spending down by barely $600 million or less than 5%. of projected imports.
decision we will hit import of cars, mobile telephones, cosmetics, cigarettes, food, some clothing and toiletries. The Federal Cabinet approved the summary of the prohibition of importation through circulation after series of meetings at the ministry of Finance and Prime Minister’s Office.
“My decision ban the import of luxury items save the country precious foreign currency. We will practice asceticism and financially stronger people should lead in is an effort to make the less privileged among us should not bear this burden inflicted on them by [previous] PTI government”, wrote Prime Minister Shahbaz Sharif. He went on to say that together “we will overcome all challenges with resolve and determination.”
My decision ban the import of luxury items save the country precious foreign currency. We will practice asceticism and financially stronger people should lead in is an effort to make the less privileged among us should not bear this burden inflicted on their government PTI.
— Shehbaz Sharif (@CMShehbaz) May 19, 2022
This is first main policy decision what coalition government took what will happen now pass through verification of World Trade Organization (WTO) and International Monetary Fund. WTO calls on members countries keep international trade open, but allows temporary restrictions under certain circumstances, including balance delay of payment crisis.
import of in items was forbidden support balance of regulations on payments, according to the Cabinet of Ministers decision. It was decided that the ban would not apply on import in rupees or through a barter mechanism by land routes.
Ban on import of these items could be reviewed in two months, the federal cabinet decided.
However, step which also in first serious move through coalition governmentseems to be too small. Ban of The imports will reduce the monthly import bill by $280 million to $300 million, according to the Federal Council. of Income official. This saving is hardly 5% of monthly import bill of $6.6 billion.
For current fiscal yearprevious Pakistan Tehreek-e-Insaf government planned to limit imports at $55 billion, which, according to the Pakistan Bureau of There are statistics already fired up up to $65.5 billion during first 10 months.
Ministry of Commerce predicts that imports will rise to $77 billion by the end of the year. of June. The projected savings of $600 million would be about 5%. of annual account.
Premier Shehbaz initially ordered imports to be capped at $2 billion a month. Ministry of Commerce and FBR have prepared a plan to reduce imports by $984 million per month through a ban and increase in regulatory responsibilities. Finance Minister Miftah Ismail was against imposition of restrictions on import and wanted to regulatory fees will be significantly increased.
But later prime minister turned around down offer to slap regulatory duties and instead decided to completely ban the import of about 41 items in in addition to import restrictions of Components of vehicles (completely dismantled or CKD vehicles) and semi-knocked down (SKD) mobile phones by half.
decision set quota limits on CKD vehicles and mobile SKDs will be provided through the Technological Development Board and the State Bank. of Pakistan, according to officials involved in decisions.
Also read: government bans import of essence and luxury items
federal government authorized under the Imports and Exports (Controls) Act 1950 to prohibit or restrict imports and exports of Any good or class of goods, through a published order in in official bulletin. import of proposed list of insignificant items can be disabled by placing them in Appendix of Import Policy Order (IPO), 2022
The Cabinet decided that the ban will accept effect from the date of of publication of notice and ministry of Commerce issued a notice with instant effect. However, as stipulated by the reservation to paragraph 4 of IPO 2022, import for What is the score of bill of lading or irrevocable letter of The loan was disbursed prior to notice of the amending order is exempt from the prohibition.
General agreement on Trade and Tariffs (GATT) 1994 framework where members of WTO may ban or restrict imports of any product on grounds of protection of human, animal and plant health and safety, protection of environmentmoral, religious and security reasons, as well as to prevent balance of payment crises, the cabinet said.
Ministry of The Ministry of Finance informed the IMF about the ban on import.
For the week ended May 13, 2022, the State Bank’s foreign exchange reserves decreased by $145 million to $10.16 billion.
items which were approved for the ban included mobile Telephone in fully built unit (CBU) form, while kits of phones entering the country as host phones will be reduced to half.
Cabinet also decided to completely ban home device in CBU uniform, cosmetics, fruits and dried fruits, decorations, pet food (cat and dog food), private weapons and ammunition, shoes, chandeliers and lighting, headphones and loudspeakers, decor items, sauces and ketchup.
Another items prohibited doors and window frames, travel bags and suitcases, sanitary ware, fish and frozen fish, carpets other than those imported from Afghanistan, canned fruit, tissue paper, furniture, shampoos, cars, confectionery, luxury mattresses and sleeping bags, jams and jellies, corn flakes , plumbing, toiletries, heaters, blowers, sunglasses, kitchen utensils, sparkling water, frozen meat, juices, pasta, ice cream, cigarettes, shaving products, elite leather apparelmusical instruments, saloon items and chocolate in retail package.