KARACHI, Aug 30: The Overseas Investors Chamber of Commerce and Industry (OICCI) has said that the government decision to discourage luxury imports may lead to evasion of duties and increase in illegal trade of goods, in case the policy implementation remains weak.

“An estimated $6 billion expenditure on luxury and non-essential items is an unnecessary burden and the one that can be avoided. The step is expected to boost the manufacturing sector and help inculcate habit of using locally made products.

“At the same time, the government can contribute by reducing the entourage and protocols accompanying dignitaries on foreign trips and set the example for the country to follow,” the OICCI said in a statement.

The chamber emphasised that restriction on imports should be for a short-term to help curtail the outflow of precious foreign exchange but “government needs to outline policy guidelines for the remaining fiscal, through consultations with a greater number of stakeholders, such as industry representatives, to bring on-board the expertise, confidence and interest of a larger community.”

It will help develop ownership and commitment, said the OICCI.

Of the $39.97 billion import bill, oil alone accounts for $11.38 billion (28.5 per cent). Food items constitute 10.5 per cent of the overall import bill. In order to reduce reliance on oil, it is suggested that the energy sector shifts its short-term focus on conservation measures. While international wheat and flour crisis created the gap, an agro-based country, like Pakistan, also needs to develop its agriculture sector to increase yield, and, therefore, reduce import of staple food items.