LAHORE - The manufacturers on Friday appreciated the central bank to allow advance payments on imports of basic industry raw material, which was restricted by the caretaker government, appealing the authorities to also give instructions for early processing of outstanding sales tax refunds of the industry.

PHMA chairman Adil Butt said that the decision would enable industrial units to import items for export purposes up to $10,000.

Appreciating the government on taking serious notice of the severe issue, he said the move has raised the business community's confidence and such business friendly policies will definitely result in boosting the trade and industry.

He said that the facility withdrawal had severely affected the export oriented industries of the country. The move also delayed export shipments besides scaling up the cost of production.

It is to be noted that the SBP had withdrawn the facility extended to Authorized Dealers to make import advance payments against irrevocable Letter of Credit (L/C) up to 100 percent of the value of the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 on the subject merit consideration.

The PHMA repeatedly requested the SBP to grant the export orientated industrial units to make advance payment for imports of accessories and trims that are used in finished products.

The knitwear industry argued that exporters usually import trim and accessories from the buyers' nominated foreign suppliers that only start working after advance payments. Export Orientated Units have to follow buyers' requirements. Moreover, the dollar value of accessories was also nominal, besides opening of LC was not feasible and time consuming either.

On this occasion, Adil Butt also called for the release of financial stress, as blocked refunds were creating problems for the knitwear exporters, rendering them unable to retain their hard earned export markets.

He pointed out that blocked refunds were having an adverse impact on the employment and the economy of the country, as value-added textile industry was unable to tap its potential in accordance with the capacity. He termed the value-added textile sector as the backbone of the economy with great potential for earning foreign exchange. He said the regional competing countries are rapidly multiplying their exports just because of the edge they have on the cost of doing business.

Meanwhile, Lahore Chamber of Commerce & Industry also welcomed restoration of advance payment facility and said that State Bank of Pakistan deserves appreciation for feeling the woes of business community.

LCCI President Almas Hyder said that restoration of advance payment facility up to $10,000 per invoice for import of essential items for exporters without the requirement of Letter of Credit (LC) or bank guarantee to suppliers abroad would give a big relief to the export oriented sectors.

He said that this business-friendly step of State Bank of Pakistan would make easy import of necessary items for export oriented sector. He said that exporters would now be able to complete their international orders easily and cost of doing business will also be reduced.

State Bank of Pakistan has withdrawn this facility to shrink gap between imports and exports but it is not doing any service to the economy and creating more impediments for the exports instead of controlling the trade deficit. He said that imports are not a matter of concern if exports are increased.