Persistent Import restrictions spell doom for the local industry

The local industry has taken the brunt of the import restrictions imposed by the incumbent governments. Originally the idea was to restrict imports to balance the country’s trade deficit but now this restriction is starting to cause significant financial damage to the local industry.

To discourage imports the government under Chapter 85 (Subheading Especially 8535 & 8536 and others) has issued the restriction of imports of raw materials. In this regard the State Bank of Pakistan (SBP) has stopped the approvals of Letter of Credit (LC) for companies. This has led to hundreds of LCs piling up at the SBP pending approval. Without the availability of proper Raw material the manufacturing industries are unable to operate effectively and are on the verge of shutting down.

Moreover the port authorities are also imposing heavy demurrages for the shipments which were already on the way and have arrived at the port. The shipments are neither cleared for release nor are the demurrages being waived off causing serious financial losses to the local industrialists.

If these restrictions prevail it might result in mass closures of industries rendering thousands unemployed and further worsening of the economic situation of the country.