ISLAMABAD: The government has expanded trade with India by allowing import of seven more items, taking the total tally to over 1,945 goods.
The decision was taken in a meeting of the Economic Coordination Committee of the cabinet that met here under the chairmanship of Finance Minister Dr Abdul Hafeez Shaikh on Tuesday. ECC amended the Trade Policy Order 2009 to make room for the changes.
The new items include tools for tapping threads, plants and machinery for extraction and refining of rice barn oil, laboratory testing equipment for pharmaceutical industry along with their accessories and spare parts, air brake equipment and spares for railways locomotives, laboratory glassware of all sorts, methylisoxazole-sutlhamoyl-acetamide – an intermediate chemical for pharmaceutical industry and cotton waste.
ECC also approved 15 other amendments to the trade policy which include measures to enhance the competitiveness of exports, increase trade access to key foreign markets and restrict imports of several items. The main objective of the amendments is said to be achieving an increase in exports of agricultural products such as grains, fruits, vegetables and meat as well as value-added textile products.
This year, the government is eyeing exports worth $22 billion due to rising prices of commodities in the international market.
The government also banned commercial import of used edible oil under the garb of soap stock. It also banned the import of used lubricants, hydraulic and transformer oils. Through another amendment, the government banned the export of poplar wood to Afghanistan. In order to regulate the import of toys for infants, a quality assurance certificate has been made compulsory for the exporter. To curb cigarette manufacturing by unregistered manufacturers, the import of cigarette-making paper will only be allowed to the registered manufacturers. ECC also decided to allow the import of air guns, ring blaster and bolder ballistic guns.
Depreciation rate for used cars
ECC could not take a decision on doubling the depreciation rate from one to two per cent for import of up to five-year-old cars. The proposal was meant to lower the impact of duties on the imported old cars.
At present, the Federal Board of Revenue is allowing one per cent depreciation of the payable duties on the basis of months a car ply the roads. An importer can avail depreciation of up to 24 months. ECC asked the commerce ministry and the Planning Commission to give a detailed presentation on the issue.
It also could not take a decision on giving tax incentives for setting up new car manufacturing plants for new players in the market. The proposal was aimed at checking increases in prices of locally manufactured cars.
The commerce ministry in its summary had requested ECC to reduce 32.5 per cent customs duty to half on import of Completely Knocked Down (CKD) kits for new entrants in the automobile sector. According to the second proposal, duty on those parts which are available locally should be cut to half to encourage new investment.
ECC approved the issuance of government’s guarantee worth Rs1.5 billion for the Textile City Limited in Karachi near Port Qasim on an area of 1,250 acres. It is a joint venture between the Government of Pakistan and Prime Financial Institute. The land for the textile city has been acquired from the Port Qasim Authority.
Published in The Express Tribune, March 2nd, 2011.
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