The FPCCI has expressed its concern over the withdrawal of facility extended to the local importers by the State bank of Pakistan at a time when the industrial sector was already in deep crisis due to high cost of inputs and several other problems such as electricity and gas, raw material prices, inflation and high cost of doing business.
In a statement it said that requirement of advance payments against irrevocable Letters of Credit (LC) up to 100 per cent of the value of the goods and up to US$10,000 per invoice for the import of all eligible items would result in severe liquidity crunch which would increase the probability of default in payment of short term liabilities.
The FPCCI pointed out that the industrial growth was already below the mark while the GDP growth failed to meet the target and as such this step would further increase the cost of production which would make local products more competitive in international as well as national market.
Keeping in view the existing economic conditions FPCCI has demanded that all industrial raw materials be exempted from the requirement of LC margin while finished products should be subject to —- per cent margin and luxury goods including home appliances be subject to maximum LC margin of —- per cent.
On the other hand, FPCCI urged that State Bank of Pakistan to restrict the commercial banks from implementing this policy until the business community is on board with SBP.
