LAHORE: Finance Minister Miftah Ismail on Thursday announced that the government will be rescinding the ban on imported goods into Pakistan, including completely-built-up (CBU) cars.
“So, the choice is simple; we either use that money to buy cars or wheat. That we buy mobile phones or grain, or home appliances, microwaves and air conditioners as opposed to edible oil.” said Ismail while speaking at a press conference at Islamabad.
The government had imposed a ban on all imported commodities on 19th May to curb foreign exchange outflows amidst a worrying balance of payments issue. The ban will be replaced by “maximum amount of permissible regulatory duties”, said Ismail.
The announcement will provide a sigh of relief to many automotive manufacturers whose business model relied solely on CBUs. The German Pakistan Chamber of Commerce and Industry (GPCCI) had already written a letter to Miftah Ismail and Minister of Commerce, Syed Naveed Qamar.
In the letter. The GPCCI had outlined how German automotive manufacturers were reeling from the impact of the import ban. The GPCCI stressed that this would have negative ramifications on Pakistan’s foreign relations with Germany and the European Union.
Syed Arshad Raza, CEO Premier Motors, termed the import ban as “optics” when Profit reached out to him regarding the matter following the GPCCI’s letter. “The CBU & Parts imports done by the German brands do not impact the Pakistani Foreign Exchange outflow”, said Raza when asked about the ban.
CBU cars accounted for $306,221,000 of the total $80,489,884,000 import bill during FY 2021-22. This translates into 0.38%. The efficacy of the restrictions is debatable.
However, one thing to note in Ismail’s press conference is the usage of the word ‘ban’ and not ‘restrictions’. This is because there was no mention of relief for completely-knocked-down (CKD) kits that are required by domestic manufacturers. CKD kids were never banned but were instead subject to increased oversight by the State Bank of Pakistan (SBP).
“So ours was never banned, only restricted. So maybe they will continue the restrictions” said Asghar Ali Jamali, CEO Toyota Indus Motor Company (IMC), when speaking to Profit about the press conference.