ISLAMABAD, April 26: Pakistan on Wednesday formally allowed duty and tax free import of cement and clinker from India at a substantial subsidy on freight rates through rail, road and sea routes with immediate effect.
For this purpose, the ministry of commerce has included cement in the positive list of importable items from India through an amendment in the Import Policy Order 2005. As a result, the number of items allowed for import from India has increased to 773.
The cement import from India is now permissible to private and public sector entities including Earthquake Rehabilitation and Reconstruction Authority (ERRA) for reconstruction needs in Azad Kashmir and the NWFP.
The commerce ministry issued the statutory regulatory order (SRO) in this regard on Wednesday after incorporating amendments in appendix G of the Import Policy Order, 2005. The SRO says the import of cement and clinker has been allowed from India by rail, road or sea.
On April 14, the Economic Coordination Committee (ECC) of the cabinet had taken a decision to allow duty free cement import with Rs60 per bag discount on freight rates from India to Pakistan and another 30 per cent reduction in railway freight.
The ECC had also waived taxes and duties on cement and clinker import. It, however, took about two weeks to legalise the decision through an SRO.
Sources in ERRA said they had no immediate plans to import cement from India for reconstruction but added the new legal instrument had been put in place to enable direct imports if so required.
The sources said the private sector had initially made commitments with Indian counterparts to import about 100,000 tons of cement but had not opened letters of credit to formalise their contracts due to absence of a formal legal notification.
The ECC had expressed serious concern over extraordinary rise in the prices of cement without corresponding rise in input prices of cement.
The government would now provide Rs60 per 50-kg bag freight subsidy for all cement imports irrespective of its transportation routes to encourage cement imports. Furthermore, the Pakistan Railways would also provide 30 per cent concession on transportation rates of cement and give priority to cement movement to upcountry.
The duty drawback on export of cement to Afghanistan has already been withdrawn till further orders to discourage exports.
