Amendments empower commerce minister to grant trade exemptions, streamline import process

Islamabad has amended two parliamentary acts allowing the commerce minister to grant one-time import and export waivers. Previously, this power could be exercised only by the federal cabinet to prevent its misuse.

The exemptions can be applied to any type of good, but their primary use is expected to be reserved for vehicles. Parliament passed the bills in 2023; however, then-President Dr Arif Alvi refused to sign them. According to reports, his decision was based on the fact that the commerce minister was not allowed to exercise cabinet power.

President Asif Ali Zardari, however, has signed the bills to complete the motion set forth by the parliament. The decision took effect immediately, meaning that the commerce minister can exercise this authority from today on.

Reports also revealed that exemption requests will be granted only in certain circumstances where trade outcomes will serve to benefit commercial activities. The commerce minister can issue exemptions by writing an official notification along with reasons for granting the exemption.

The exemption will grant traders the permission to export, re-export, import or re-import goods without facing any restrictions. Analysts have outlined the importance of stringent vigilance surrounding the exemption process, as a misuse of authority could allow for certain goods to enter Pakistan that violate the law.

Reports have highlighted that this power was initially transferred to the federal cabinet to provide more oversight over the exemption process and ensure that it was used for genuine situations only.

Prior to the amendment, the commerce ministry had to request approval from the federal cabinet. While this allowed for more transparency, cases would not always get reviewed immediately.  The commerce ministry has outlined the importance of being granted this authority as it will help expedite the import process.

A vast majority of cases that require exemptions surround the import of automobiles into the country, as a small fraction of cars violate the Import Policy Order.

Experts are speculating that misuse of authority could cause a slight reduction in the demand for locally assembled cars. Since the import process has become more streamlined, Pakistan could see a rise in the import of vehicles. This poses a significant threat to local automobile giants such as Toyota Indus, Honda Atlas and Suzuki Motor Company.

Reports have revealed that the act also allows the secretary of commerce and director general of trade organisations to oversee the daily operations of traders. Essentially, the commerce division can now make decisions that will affect industries across Pakistan.