Govt To Tackle Rising Production Costs, Industry Challenges: Jam Kamal

LCCI President has asked the government to provide relief measures to boost industrialization.

LAHORE: (UrduPonit/UrduPoint / Pakistan Point News-May 29^th, 2024) Federal Minister for Commerce, Jam Kamal Khan, announced that the government has developed a comprehensive strategy to address the rising production costs affecting the manufacturing sector. This plan aims to create a supportive business environment to reduce unemployment and promote SMEs.

Speaking at the Lahore Chamber of Commerce and Industry (LCCI), Khan engaged with LCCI members for two hours, addressing their concerns and promising his full support. He emphasized that maintaining close contact with the business community is essential for understanding and resolving their issues. The government's Primary focus includes addressing trade challenges, export and import hurdles, manufacturing issues, and tariff competitiveness. He also mentioned the need to tackle broader issues like circular debt, IMF conditions, and institutional inefficiencies that burden consumers.

Khan highlighted that Prime Minister Shehbaz Sharif has assured the involvement of relevant stakeholders in resolving economic issues.

LCCI President Kashif Anwar welcomed the Minister and outlined the business community's challenges, including inflation, Currency depreciation, rising energy costs, high-interest rates, and increased cargo charges. He expressed concerns over recent SROs that have added to the tax burden on registered individuals, worsening the situation.

Anwar proposed revisions in the tariff structure to support local industries and reduce smuggling. He suggested eliminating duties on non-locally produced raw materials and simplifying the complex duty system to boost industrial operations and competitiveness. He also stressed the importance of accessing untapped markets like Africa, Central Asia, and ASEAN countries to

increase exports. Besides textiles, rice, and leather, Anwar identified sectors like halal food, pharmaceuticals, IT, and engineering with significant export potential. He called for resolving payment issues in the IT sector and ensuring all remittances are brought to Pakistan rather than held in foreign banks.

Anwar advocated for the reassessment of trade agreements with countries where Pakistan faces trade deficits, and he mentioned the potential signing of an FTA between Pakistan and the GCC within the next few months. He also discussed implementing a barter trade mechanism with Iran, Afghanistan, and Russia to improve trade with neighboring countries.

Addressing sector-specific issues, Anwar highlighted the restrictions on jewelers, suggesting they be allowed to bring back 100% gold or receive gold through the State Bank.

He pointed out high duties on food and dietary supplements and called for revising duties on steel sector raw materials. The carpet industry, he noted, requires inclusion in existing and future FTAs and PTAs, along with support for participating in international fairs. He urged removing penalties on delayed export proceedings, which cause significant financial losses due to the longer shelf life of carpet products.

Anwar praised TDAP's efforts but urged for the inclusion of smaller exporters, women, and SMEs in international trade fairs. He highlighted the need for timely visa processing for members attending these events and called for establishing a framework with embassies to facilitate this.

In response, Jam Kamal Khan acknowledged that economic instability and foreign exchange issues deter investors, making it difficult to attract new investments. He stressed that the business community's contributions to government revenue through taxes should not be overburdened, as this could stifle business activity and reduce overall revenue. He emphasized the need to reduce energy costs for industrial growth and called for a business-oriented tariff board rather than one focused solely on tax revenue.

Khan highlighted the formation of a committee by the Prime Minister, including key members like Awais Leghari and Muhammad Aurangzeb, working on a tier structure to achieve economic stability. He mentioned ongoing efforts to restructure TDAP to address the industry's needs and focus on both northern and southern regions.

Discussing SROs, Khan noted the creation of a committee with representatives from the State Bank, FBR, finance, ports, and shipping, which has been addressing various issues over the past two months. This committee's report will be presented to the Prime Minister soon.

Khan also highlighted the significant potential of e-commerce and the importance of addressing digital payment and sharing issues. He emphasized the critical role of SMEs in the economy and their growth through e-commerce.

He mentioned leading the anti-smuggling committee, focusing on balancing local market production and preventing smuggling, particularly in border areas and Afghan transit trade. Khan proposed establishing a dedicated desk to resolve chamber-related matters and assured that the Ministry of Commerce would actively advocate for the business community's interests on all forums.

Finally, he announced the introduction of plug-and-play facilities in all trade zones to further support industrial growth and competitiveness.