ECC authorizes the import of 50,000 MT of urea from China
ISLAMABAD: The government finally took the long-awaited measures on Wednesday to reduce the growing import bill and imposed an increase in regulatory fees (RD) on the import of electric vehicles and other cars of 1500cc and above.
The Cabinet Economic Co-ordination Committee (ECC) made some changes to the summary presented by the Tariff Board and imposed a 10 percent regulatory duty on the import of 1,500cc electric vehicles or a 50-cc battery. kWh against the recommendation of the Tariff Board to impose 27% R&D on its import. On other cars (Fully Built Unit) the DR has been increased from 15% to 50%. On cars 2000cc and larger, the DR has been increased up to 100%.
Three proposals were filed with the ECC like electric cars, the forum approved to slap 10 percent of RD. On hybrid cars, the ECC has approved increasing the imposition of the regulatory requirement from 15 to 50 percent. On normal imported cars (Completely Built Unit-CBU), the RD has been increased by 15 to 50 percent on cars 850cc and larger. While on cars 2000cc and larger, DR was imposed at a rate of 100 percent.
The ECC also approved 5 percent R&D on sodium carbonate and it was said at the ECC meeting that it was being dumped in the country due to the devaluation in Turkey. On a textile product, the R&D has been reduced.
The ECC did not make any changes on cars imported below 1500cc during the meeting. The Tariff Board presented three different proposals to the ECC in its summary and the forum approved the increase in car import R&D with a tariff change to reduce the import bill. There are other raw materials and intermediate goods on which the DRs have been slashed.
At one point, Finance Minister Shaukat Tarin announced that the government was considering a six-month ban on imported cars, but after stiff resistance from the Ministry of Trade and Industry, the government changed its mind and has now increased RD on cars of 1500cc and above on a fully built unit (CBU).
Federal Minister of National Food Security and Research Syed Fakhar Imam, Federal Minister of Industry and Production Makhdoom Khusro Bakhtiar, Federal Minister of Energy Hammad Azhar, Federal Minister of Privatization Muhammedmian Soomro, Federal Minister of Resources en eau Chaudhry Moonis Elahi, Advisor to the Prime Minister on Trade and Investment Abdul Razak Dawood, federal secretaries and senior officials attended the meeting.
The Ministry of Commerce has submitted a summary for the rationalization of tariffs on importation of vehicles and other items requested by MOIP and other sectors. The meeting discussed the summary in detail and approved the recommendations of the Tariff Policy Board with some modifications. The forum also decided to review some recommendations related to the automotive sector after six months.
The Ministry of Industry and Production has filed a summary for importing urea from China by TCP. After deliberation, the ECC authorized the immediate import of 50,000 tonnes of urea on a GoG basis with the People’s Republic of China, subject to the authorization of the PSQCA. TCP was also responsible for negotiating the price with the Chinese supplier authorized by the Chinese government for a new import of urea.
The ECC also approved requests for additional technical grants submitted by the Petroleum Division and the Finance Division. The Power division’s request for TSG was also approved subject to the merger with the finance division.
When contacted, former finance ministry adviser Dr Khaqan Najeeb said provisional trade data released by the Pakistan Bureau of Statistics (PBS) paints a worrying picture of the trade balance. Imports remain very high. Imports in December 2021 were recorded at $ 7.6 billion; only a paltry drop from $ 7.9 billion in November 2021.
He thought that the issue of persistent high imports was of concern, given the massive adjustment of the rupee which made imports more expensive, the increase in the key rate of 2.75 pc, the increase in the margin. L / C and other measures taken by the government and SBP.
He said the government argued that few one-off imports increased the import bill until November, which was over. He suggested that in-depth professional analysis is needed to break down the import data, analyze the quantitative and price effect, and devise another course of action.
He believed that it would also be useful to look at non-tariff barriers. However, he stressed that in the longer term, develop local industries, move away from dependence on imported energy and above all work on agricultural productivity rather than importing lentils, sugar, cotton, edible oil and wheat is the only way for Pakistan. At the going rate, the trade deficit for fiscal 22 could potentially reach $ 50 billion, or a whopping 16pc of GDP. In such a scenario, the gross need for external financing could exceed the envisaged 26 billion dollars.