ISLAMABAD: In what appears to be a major step towards fast revival of trade relations with India after a gap of nearly two years, Pakistan on Wednesday allowed import of sugar, cotton and cotton yarn from across the border through land and sea routes. Finance Minister Hammad Azhar made the decision public after a meeting of the cabinet’s Economic Coordination Committee.
Mr Azhar, who presided over the ECC meeting for the first time a day after taking the charge of finance ministry, told a presser that sugar “price in India is significantly cheaper than Pakistan; therefore, we have decided to open its trade and allow commercial import of 500,000 tonnes of white sugar”.
The minister said the decision was taken to improve supplies and discourage price hike in Pakistan as sugar in India was 15pc to 20pc cheaper. An official statement said the ECC allowed the commercial import of white sugar from India till June 30, 2021 through land and sea routes, on the basis of quota issued by the Ministry of Commerce. The decision would be time and cost effective and would also stabilise the prices of sugar in the domestic markets, it added.
ECC allows import of sugar, cotton and cotton yarn from across the border
While explaining reasons for allowing the import of cotton and yarn from India, Mr Azhar said after an increase in textile exports there was a strong demand for cotton in Pakistan. Since the import of cotton and yarn was already permissible from across the world, their import from India would facilitate small textile industries because big players had the capacity to have imports from Egypt and other parts of the world, he said.
Besides the move aimed at boosting value-added exports in the textile sector, the ECC also allowed import of three million tonnes of wheat and fixed the minimum support price for wheat at Rs1,800 per 40kg from existing rate of Rs1,650 to encourage the farmers to grow more crop. The committee also approved the wheat procurement targets of Passco and provincial food departments. Import of 3m-tonne wheat was allowed through Trading Corporation of Pakistan, government-to-government and private sector to meet the requirements of local consumers and build strategic reserves.
Responding to a question about the background for normalising trade ties with India that had been suspended since August 2019 when the country decided to merge Jammu and Kashmir as union territory, Mr Azhar said the government had to take decisions, which were “in the interest of the people”. Asked why the import of tomato, onions, potatoes were not allowed from India despite their skyrocketing prices in the past, the minister said the decision would be taken when such a situation evolved.
Trade with India had remained completely suspended following the August 2019 Indian action in Kashmir until May 2020 when Pakistan relaxed the restrictions only for the import of medicines and related material.
The ECC also approved a summary of the petroleum division regarding reduced gasoline transport tariff of PARCO’s Mehmoodkot-Faisalabad-Machike (MFM) pipeline at 85pc of the prevalent railway tariff.
The meeting also approved the registration of Pakistan’s “Pink Rock Salt” as Geographical Indications (GI) with Pakistan Mineral Development Corporation (PMDC) to be notified as “Registrant”. Registration of Pink Salt as a GI of Pakistan will promote and enhance national and international trade, stimulate global demand and attract premium price for Pakistan.
The ECC also approved the summary presented by the commerce ministry regarding amendment in Export Policy Order 2020 to waive the condition of minimum export price for single-use surgical instruments marked with appropriate and internationally recognized symbols and colour schemes to indicate “single-use items”. The product has to be certified by Sialkot Material Testing Lab (Simtel) on the basis of physical and chemical tests.
The ECC also approved the addendum/amendment to security package document of 660KV HVDC Matiari-Lahore Transmission Line Project.
On recommendation of the Ministry of Industries and Production, the ECC approved the issuance of government guarantee required against letter of credit facility of Rs2,522bn, extended by the National Bank of Pakistan to Pakistan Steel Mills.
Strategic trade policy
The ECC deferred the decision on Strategic Trade Policy Framework (STPF) 2020-25; however, approved the formation of the National Export Development Board (NEDB) as requested by the Ministry of Commerce to facilitate economic outreach initiatives.
The ECC also approved a total of about Rs5.552bn as 11 technical supplementary grants including about Rs1bn for the ministry of education and professional training for two separate projects, Rs600m for the award of Allama Muhammad Iqbal scholarships to 3,000 students from Afghanistan by the Higher Education Commission, Rs128.7m for the ministry of housing and works for development schemes in Sindh and Rs2bn for PM’s low-cost housing scheme.
The grants also included Rs450m for construction of new building of Supreme Court’s Karachi registry, Rs1.2bn for Pakistan Atomic Energy Commission, Rs22.59m for the Ministry of National Food Security and Research for wheat freight subsidy. A couple of grants were also approved for gas development schemes in Sindh and the privatisation commission.
Published in Dawn, April 1st, 2021