The Ministry of Commerce (MoC) urged to abolish the provision of "Hawala" in trade policy, being used by a good number of people for payment on account of imports of goods from different countries, including China, which has become main source of under-invoicing and misdiclaration.
The under-invoicing and misdeclaration that was causing huge losses to the national exchequer would continue as long as smuggling exists, said Lahore Chamber of Commerce and Industry (LCCI) Chairman of Standing Committee on Customs and Ports Aftab Ahmad Vohra. Talking to Business Recorder here on Tuesday, he said the ministry should abolish all kinds of provisions allowing imports other than the letter of credit (L/C) and banking channels.
The government's logic behind such provision was to save foreign exchange with the banks, while the importers were allowed to arrange foreign currencies at their own for payment of their import consignment, he said. In any case, the country's foreign exchange was utilised for this purpose and thus the idea was no more practicable or beneficial, he opined.
He, however, was of the view that samples should remain allowed under this provision and the main consignment of the imported goods should be restricted through banking channels after opening of the letter of credit, which would help improve earning of the national exchequer.
Talking about Wahgha-Khyber trade agreement between Pakistan and Afghanistan to provide market access to India in the Central Asian States, Vohra urged the Pakistan government to enter the agreement on reciprocal basis and should demand of India to also provide land route access to Bangladesh for Pakistani goods. As such the agreement would be fruitful for both the countries, he added.
"Similarly, Pakistan can allow Indian Punjab to exports its goods through Karachi port, as exports through Mumbai port for them is not only time consuming, but also more expensive," he said, and added this would also help generate substantial amount of revenue to our exchequer.
Vohra said the Pak-Afghan border was not only open for smuggling between the two countries, but was also under the grip of terrorism. Thus prior to signing and implementation of the Wahgha-Khyber trade agreement, the US and other countries should come forward and provide funds for sealing the border by erecting iron fence that would restrict free movement on both sides of the border, he said.
Asked about the possibility of rise in smuggling in the backdrop of Afghan transit trade, he said the use of latest technology could avert the possibility of smuggling. The clearance of consignment containers should be subject to matching of the pictures taken on every entry and exit point, he said. Moreover, the movement of the consignment containers could also be monitored through power full tracker and as such the offloading of containers within the Pakistan territory would be minimised, he added.
To another question about the impact of the import of Indian goods on local industry, Aftab Vohra said if Pakistan could absorb the negative impact of the Chinese goods, why not the Indian goods, which would be comparatively less harmful to our industry. He, however, stressed the need for ensuring balance of trade between Pakistan and India that had remained in favour of later during the last couple of years.
The Indian government should be asked to establish its quality control centre at the border for Pakistani goods to facilitate Pakistani goods' exports, as its centre at Goa, he suggested. The Indian government had enforced the law of Intellectual Property Rights, he said, adding that Pakistan should seek exemption for its goods from India to avert unnecessary cost.
He said India had strong demand for cement, while Pakistan had surplus quantity after satisfying its local demand. But because of lack of sufficient capacity of railway wagons, the cement exports to India stayed below the potential. He demanded of the government to allow cement exports to India by trucks, which would be equally beneficial for both India and Pakistan and would help minimise trade imbalance between the two countries.