Dollars dearth: industrialists fear industry closure

KARACHI: The industrialists in the country fear closure of industry in the wake of restrictions on the customs tariff chapter 84 and 86 imports.

If import of machinery and the parts is halted, the industry would stop running gradually, they say mentioning some of the sectors have slashed their productions as they are in a difficult situation in the face of growing currency crisis.

The State Bank Foreign Exchange Department (FEOD) has made customs tariff chapter 84, 85 import payments conditional on its approval. The commercial banks, after this State Bank’s condition, are not making dollars available to the importers. After the circular issued by the FEOD on July 5, the import of every kind of plant and machinery, capital goods and raw material has stopped. Some 2000 consignments are stuck at different ports and almost same number of consignments is on its way.

Before that, about 1000 consignments remained stuck at the port after government slapped a ban on the import of luxury items. The importers had to pay heavy demurrage to the shipping companies.

The industrialists say they need a supply chain to run industry, adding big industries require raw material all the time. The State Bank’s decision severely affected the auto industry, mobile phone manufacturing and big industries negatively. The most concerned are those industrialists whose consignments have reached at the port and are being asked by the suppliers to pay the bill. Though importers have the money but are unable to send the amount to them. Those who import goods under Cash Against Document (CAD) are of the view their clients are getting angry with them as they are not able to make payment timely.

They say they can’t tell the suppliers we are not getting dollars, as it’s against the interest of the country. “But, as a result we will not get imported goods in future”, they say.

Sources say FPCCI, Pakistan Business Council and members of industry organisations have approached the authorities to apprise them of severity of the issue. The issue is still unsolved. When contacted, a Finance Ministry officer told this correspondent they are aware of the issue. The ban on imports will remain imposed till the last week of August, he said. It will be lifted when the government gets loan tranche from the IMF, he said.