Businesses in Pakistan that need to import materials or goods for use in the manufacturing process will no longer be required to obtain letters of credit (L/Cs) in order to pay for every purchase of foreign goods.

The relaxation of the rules designed to control the flow of goods into the country has been made because, according to a government minister, the country's manufacturers need an uninterrupted supply of adequate raw materials, machinery and the latest technologies.

Trade policy

Minister of commerce, Humayun Akhtar, says that the trade policy for 2003-04 is designed to improve the efficiency of Pakistan's manufacturers and gradually exposing them to international competition.

"As per current Import Trade & Procedures Order a facility has been provided to the importer to import permissible goods worth US$5,000 in one fiscal year through foreign currency demand draft etc, without the opening of L/Cs," he says.

Beneficiaries

Some industrial users may be able to enter into much more valuable purchases without an L/C. Spare parts and machinery imported by air or courier worth up to US$30,000 per fiscal year can be brought in against foreign currency demand draft.

Expatriates working outside Pakistan also stand to benefit under the new policy. They will be allowed to send permitted goods bought from their own foreign exchange earnings without an L/C to Pakistan.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.