The coalition government removed the import restrictions on non-essential and luxury goods on Thursday, but the prohibitions on the import of fully assembled cars, cell phones, and home appliances will still be in effect. According to the Ministry of Finance, the decision was made during the Economic Coordination Committee (ECC), which was presided over by Finance Minister Miftah Ismail, following a significant drop in imports.
During the meeting, the Ministry of Commerce submitted a summary on prohibition/complete quantitative restrictions on the import of non-essential and luxury items.
The members were briefed that in order to curtail the rising current account deficit, a ban on the import of about 33 classes/categories of goods was imposed with the approval of the cabinet.
“Due to the decision, the overall imports of the banned items have shrunk by over 69% — from $399.4 million to $123.9 million,” the statement read, mentioning that the ban has, however, impacted supply chains and the domestic retail industry.
Furthermore, it’s pertinent to note that all held-up consignments (except items that still remain in the banned category) which arrived at the ports after July 1, 2022, may be cleared subject to payment of 25% surcharge.
The government imposed a ban on the imports of more than three dozen non-essential and luxury items on May 19 as part of an emergency economic plan to stabilise the depleting foreign exchange reserves and rising import bill.
Earlier, the Ministry of Commerce had banned imports of items such as aerated water and juices, Auto Completely Built Units (CBU), sanitary and Bathroom Waves, Carpets excluding Afghanistan, Chandeliers and Lighting Devices or Equipment, Chocolates, Cigarettes, Cosmetics and Shaving Items, Tissue Papers, Crockery, Decoration/Ornamental Articles, Dog and Cat Food, Doors and Window Frames, Fish, Footwear, Fruits and Dry Fruits, Furniture, Home Appliances CBU, Ice Cream, Jams, Jellies and Preserved Fruits, Luxury Leather, Jackets and Apparels, Mattress and Sleeping Bags, Frozen or Processed Meat, Mobile Phones CBU, Musical Instruments, Pasta, Etc, Arms and Ammunition, Shampoos, Tomato Ketchup and Sauces, Sunglasses, Travelling Bags and Suitcases.
However, it is worth mentioning that while the imports have shrunk, the current account deficit widened to $2.3 billion in June. Moreover, the foreign exchange reserves continued to deplete and fell below $9 billion as of July 22, while the Pakistani rupee is at an all-time low of 239.92 against the US dollar.
On the other hand, restrictions are still in place on the import of fully assembled cars, mobile phones, and home appliances. As a result, Pakistan’s two top automakers, Toyota and Suzuki, planned partial plant shutdowns due to the shortage of raw materials brought on by the restrictions.
