Pakistan lifts ban on import of non-essential, luxury items

Pakistan’s Finance Minister Miftah Ismail. File

Pakistan’s Finance Minister Miftah Ismail. File | Photo Credit: Reuters

The Pakistan government has decided to lift a recently imposed ban on the import of “non-essential and luxury items” to control the cash-strapped country's depleting foreign reserves, according to media reports on Friday.

The Economic Coordination Committee (ECC) of the Cabinet presided over by Finance Minister Miftah Ismail in its meeting on Thursday also allowed importing 2,00,000 metric tonnes of wheat worth $85 million at $407.5 per tonne.

On May 19, Pakistan slapped a ban on import of 33 categories of goods, covering more than 860 product lines.

The import restrictions were introduced after the new government led by Prime Minister Shehbaz Sharif which assumed office in April, came under pressure to take measures to avoid default on external liabilities.

However, the decision was criticised by importers and the powerful elite – the main beneficiary and consumer of such goods.

The Economic Coordination Committee (ECC) of the Cabinet presided over by Finance Minister Miftah Ismail in its meeting on Thursday decided to remove the ban on “non-essential and luxury items” excluding automobiles, cell phones and electronics, the Dawn newspaper reported.

The ECC also lifted the ban on imported goods except for completed built units (CBUs) of automobiles, mobile phones and home appliances.

The meeting was told the ban had helped cut the imports of banned items, which shrank by around 70% from $399.4 million to $123.9 million between May 20 and July 19.

The major contributors to this reduction of about $275 m were automobile and mobile phone CBUs, which had a share of 79% in the total import reduction, the report said.

The remaining 21% reduction was spread over 810 tariff lines impacting multiple sectors of the economy, including foreign investments.

Pakistan has decided to import 2,00,000 metric tonnes of wheat worth $85 million ($407.49 per metric tonne), which will increase the per kilo wheat price to Rs 106, The Express Tribune newspaper reported.

The fresh tender was slightly more expensive than the previous one. At the price of $404.86 per tonne, the government had allowed import of 3,00,000 metric tonnes of wheat last week.

Due to the relatively low exchange rate per kilo, the price was Rs 89, which would now go up to Rs 106, the report said.

With the fresh approval, Pakistan so far imported one million metric tonnes of wheat. The ECC also directed to negotiate the price of the wheat being imported from Russia under a government-to-government deal.

Prime Minister Shehbaz Sharif on Wednesday said that Russia offered to supply wheat, which his government accepted.

Pakistan faces at least three million tonnes of wheat shortage and the government so far took decisions for the import of one million metric tonnes, the report said.

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Printable version | Jul 29, 2022 5:36:03 pm |