Pakistan Tanners Association Chairman SM Naseem in a press statement on Friday expressed deep concern over the imposition of 35 percent L/C margin on import which according to him will create liquidity problem as well as push up cost of production, which will adversely affect the leather industry.
He said that the measures taken by the SBP governor as well as increase in interest rate by 1.5 percent will not benefit the exporters who are facing tough competition in the world market. The SBP's steps to curb inflation would cast a negative impact on overall economy of the country.
The PTA chairman asked the government to exempt hides & skins and chemicals being used in the value added leather industry from the imposition of 35 percent margin. He said that leather exports have just started picking up and it is feared that due to the SBP measures, the export will start declining. He said the leather industry is importing raw materials, chemicals, etc, for value addition and 25 percent of its imports are used for re-export.
He said that the 35 percent cash margin will ultimately increase the cost of raw material used in the manufacturing thus making the local products uncompetitive in the foreign markets.
The PTA chairman appealed to the government to withdraw this decision and exempt the raw materials used in leather industry from 35 percent margin on imports and also withdraw increase in interest rate so that this industry could compete in the world market.-PR
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