Govt to Unban All Luxury Items Except 2 Important Ones

Less than 3 months ago, the coalition government announced a ban on the import of luxury items. It was an extensive list of commodities that also included completely built-up (CBU) cars. The government will remove the ban on luxury items, with the exception of cars and mobile phones.

The government claims that vehicle and mobile phone imports have contributed greatly to Pakistan’s soaring import bill. The officials said that most of the banned items have little impact on the foreign exchange reserves.

CKD Import Restriction

The import bill for completely knocked down (CKD) kits has reached $1.7 billion, marking a new record. Compared to $1.11 billion in Fiscal Year (FY) 2021, the import bill has increased by 52 percent. The increase took place despite a gradual rise in inflation and restriction on car financing by the State Bank of Pakistan (SBP).

While the auto sector’s growth is promising, it raises concerns about Pakistan’s current account deficit. Experts say that the launch of new cars from automakers with scarce localization of parts is damaging Pakistan’s economy.

The car companies are awaiting the approval of the Letter of Credit (LC) by SBP to begin importing CKD kits for their cars. However, the delay is intentional to restrict all auto sector imports due to their impact on the foreign exchange reserves.

Via: Dawn