The business community of Sialkot is contributing $1 billion to national exchequer in the shape of foreign exchange through its exports annually.
Due to the defective and weak policies of the government the business community is suffering due to high prices of raw materials, high tariff of utility bills, heavy provincial and federal taxes and severe energy crisis, and the growth of industrial sector is on the decline.
The exporter community of this export-oriented city and hub of cottage industry of the country is facing very tough competition in the global market and, in the present scenario, it is feared that the exportable products would be expelled from the international market.
The recent announcement of State Bank of Pakistan imposing 35 percent margin on letter of credit would shatter the economy which would pave the way of further decline in exports. The increase in interest rate has also created panic among the exporter community.
The increase in LC margin from zero to 35 percent and increase in interest rate to 12 percent would destroy the industrial sector and hamper the exports. The State Bank of Pakistan should impose 35 percent LC margin on luxury items and various class of food items, which are not essential including, imported beverages, confectionery goods, cell phones and vehicles. The business community reckons that imposition of L/C margin on industrial raw materials is not logical which would cripple the export industry of Sialkot to the extent and weaken it.
The decision of State Bank of Pakistan would not only enlarge the unemployment graph but would also bring the industrial workers into streets. Instead of controlling inflation, the measures adopted by the State Bank of Pakistan would multiply the financial woes for the industrial sector.
The local business community urged the State Bank of Pakistan to reconsider its decision for exempting those units from imposition of 35 percent LC margin which export 80 percent of the imports, and the 1.5 percent increase on interest should be made applicable on fresh loans, while previous loans may also be exempted from the higher interest of industrial sector and exports. The exporter community appealed to the Prime Ministers and federal Commerce Ministers to intervene for redressal of this burning issue as early as possible.