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Lahore, August 13, 2018 (PPI-OT): The Pakistan Hosiery Manufacturers and Exporters Association has said that latest move of import restriction by the central bank has been hindering the smooth process of future export orders, leading to decline in foreign inflows amidst highest trade deficit in the country.
PHMA Central Chairman Dr Khurram Anwar Khawaja expressed the concern over severe inconvenience caused to exporters in completion of their orders due to disallowing exporters to make advance payment upto $10,000 per invoice for the import of all eligible items without the requirement of L/C or Bank Guarantee from the supplier abroad. The PHMA Office Bearers and Executive Committee in its meeting have demanded the SBP to immediately restore the required facility for the exporters. Otherwise the SBP will directly be blamed for decline in exports as the orders from foreign buyers have been affected.
The SBP, through its Circular No.06, dated 14th July, 2018, has withdrawn the facility extended to manufacturers to import even the basic raw materials used in export items on advance payments upto 100% of the value of the goods and upto $10,000 per invoice for the import of all eligible items without the requirement of L/C or Bank Guarantee from the suppliers abroad. However, in case, Authorized Dealers deem that a request on the subject merits consideration, they may approach State Bank of Pakistan along with appropriate recommendations on a case to case basis. Nevertheless, the SBP has not processed a single request till date and the time consumed at SBP for this purpose is not at all affordable for export sector in this highly competitive world.
Dr Khurram Anwar Khawaja, while addressing the PHMA Central as well as the Zonal Executive Committees, pointed out that the above withdrawal has been severely affecting the export-oriented industries and creating hurdles in meeting export commitment in time, besides increasing cost of business. He said that generally exporters import trims and accessories from the buyers’ nominated foreign suppliers through advance payments because foreign suppliers only start working after receiving advance payment.
Further Export Orientated Units have to abide by buyers’ requirements, otherwise future orders will not be placed. “Additionally, the dollar value of accessories is nominal, thus, opening of LC is neither feasible nor workable and highly time consuming. In some cases, buyers nominate foreign supplier of price tags from which exporters ought to import price tag for garment manufactured meant for export and that price tags cost are only $250 which supplier needs in advance. Hence, exporters transfer that via TT through bank and send copy of TT to the supplier and very same day supplier sends Price Tags through courier service which is matter of routine.”
Dr. Khurram said that several of import consignments are pending as suppliers need advance payments which lead to cancellation of orders and decrease in exports. “PHMA understands that such withdrawal of advance payment facility against imports by commercial importers is to curtail imports of domestic needs. Therefore, the permission of advance payment for accessories and trims to be used in export-based products must be continued as this temporary import is for export purposes only, otherwise, all the goods requiring imported accessories will face major hurdles causing a significant blow to the Export Industry, he warned.
The PHMA Chairman and its Executive Committee strongly demanded the SBP to resolve this burning issue by allowing only the Export Oriented Units (excluding Commercial Importers) to make advance payment against import upto $10,000 per invoice for the import of all eligible items without the requirement of L/C from the supplier abroad. They also demanded intervention of Ministry of Commerce and Textile to address the matter otherwise exporters fear a major decline in textile exports.
For more information, contact:
Central Office,
Pakistan Hosiery Manufacturers and Exporters Association (PHMA)
PHMA House, 37-H, Block-6, P.E.C.H.S., Karachi, Pakistan
Tel: +92-21-34544789, 34522685, 34522769
Secretary General +92-21-34545683, 34544764
Fax: +92-21-34543774
Email: info@phmaonline.com, secretary.general@phmaonline.com
Website: http://www.phmaonline.com