KARACHI: Textile exporters have said that latest import restriction will affect completing future orders and it will result in decline in foreign inflows in shape or export receipts.
The exporters have expressed the concern over severe inconvenience caused to exporters in completion of their orders due to disallowing exporters to make advance payment up to $10,000 per invoice for the import of all eligible items without the requirement of L/C or Bank Guarantee from the supplier abroad.
Office Bearers and Executive Committee in its meeting held on Saturday demanded the State Bank of Pakistan (SBP) to immediate allow / restore for the exporters required facility otherwise “the SBP shall be responsible for decline in exports as the export orders from members all over Pakistan have been affected.”
The SBP through F.E. Circular No.06 dated July 14, 2018 has withdrawn the facility to make import advance payments against irrevocable Letters of Credit (L/C) up to 100 percent of the value of the goods and up to $10,000/- per invoice for the import of all eligible items without the requirement of L/C or Bank Guarantee from the supplier 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, SBP has not processed a single request till date.
It is pertinent to mention that the above withdrawal has been severely affecting the export oriented industries and creating hurdles to meet export commitment in time and increase cost of doing of business. Generally exporters import trim and accessories from the buyers’ nominated foreign supplier by advance payments because foreign suppliers only starts working after advance payment.
Further Export Orientated Unit has to abide buyers requirements, otherwise future orders will not be placed. Additionally, the dollar value of accessories is nominal, thus, opening of LC is not feasible and time consuming.
In some cases, buyer nominates foreign supplier of price tags from which exporter ought to import price tag for garment manufactured meant for export and that price tags cost are only US $250 which supplier need 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. Several of import consignment are pending as suppliers need advance payments which lead to cancellation of orders and decrease in exports.