The Economic Coordination Committee (ECC) on Wednesday allowed the private sector to import 0.5 million tonnes of white sugar from India, Finance Minister Hammad Azhar said.

The finance minister added that the country will also import cotton from India starting from end-June this year.

Addressing a press conference in Islamabad, Azhar said that the ECC also decided to reduce the prices of petrol and diesel citing lower rates in the international market. The price of petrol was reduced by Rs1 per litre while the price of diesel was reduced by Rs3 per litre, he shared.

Another decision taken by the ECC during its meeting was to fix the minimum support price for wheat at Rs1,800 per 40 kg which Azhar termed as a "relief for our farmer brothers".

The ECC also approved the wheat procurement targets of Pakistan Agricultural Storage and Supplies Corporation (Passco) and the provincial food departments. It also allowed the import of 3MMT of wheat by the Trading Corporation of Pakistan and the private sector.

The minister said sugar trade was being re-opened with India this year because of the difference in prices in the neighbouring country.

"We have allowed the import of sugar but in the rest of the world too, sugar prices are high because of which imports are not possible. But in our neighbouring country — India — the prices of sugar are much less as compared to Pakistan so we have decided to reopen sugar trade with India for up to 0.5 million tonnes for the private sector."

He said the government estimated a difference of 15-20 per cent in sugar prices in India as compared to Pakistan.

Talking about the reason for allowing the import of cotton from India, Azhar said that there was a high demand for it because Pakistan's textile exports had increased but last year's cotton crop was not good.

"The difference [in prices] affects the SMEs (small and medium enterprises. Big industry can buy it from Egypt or other countries."

Moving on to the economy, Azhar said that the PTI government had "inherited the biggest current account deficit in [Pakistan's] history and had converted it into a surplus".

He said that when the PTI government came to power in 2018, Pakistan's foreign reserves were around $8-9 billion, most of which were swaps or taken from other countries.

"Since our government came, if we add swaps, there has been an increase of $9bn of which $6-7bn swaps were cleared. This is a very big achievement," he stressed.

The minister said that he and his team were "aware" of their responsibilities and the people's expectations. "The stabilisation we have achieved in our current account, reserves, the growth in LSM (large-scale manufacturing), we will take these forward in a better way," he added.

He emphasised that every policy of the government would be based on the benefit of Pakistan and its people, adding that it would work "day and night" to control inflation.

When asked about Hafeez Shaikh's removal, Azhar said that the former finance minister's "ability and wisdom is not being denied" but it was the prerogative of Prime Minister Imran Khan to select and change his team.

PM Imran had on Monday removed Shaikh and given the portfolio to Azhar, who was already the minister for industries and production, as an additional charge.

Information Minister Shibli Faraz hinted that the prime minister removed Shaikh from the office of finance minister, as the former was not satisfied with the increasing inflation in the country. However, in a late-night tweet, the senator took a U-turn and lauded the services of Shaikh instead.

Faraz said though Azhar was given an additional charge of finance minister, he (Hammad) would continue to serve as finance minister on a long-term basis as the prime minister was quite satisfied and happy with Azhar’s performance.

Talking about the government's raising of $2.5bn in bonds from the international capital market a day earlier, Azhar, in his conference today, termed the move as "very successful".

"We had more than 100 per cent subscription," he claimed.

The minister said the government got "competitive pricing" for the bonds which were "better prices than what other countries who also floated their bonds on the same day received".

In response to a question about the government's proposed bill to make the State Bank of Pakistan (SBP) more autonomous, he said it had been drafted while keeping in view the "world's best practices".

He said the government would table the bill in parliament with an "open mind", adding however, that the way the bill was "sensationalised was not correct".

Other ECC decisions

According to a statement from the Finance Ministry, the ECC also approved the registration of Himalayan pink salt as Geographical Indications (GI) with the Pakistan Mineral Development Corporation to be notified as a registrant.

"Registration of pink salt as a GI of Pakistan will promote and enhance national and international trade, stimulate global demand and attract premium price for Pakistan," the statement said.

A summary by the Ministry of Commerce regarding an amendment in the Export Policy Order 2020 which would allow the waiving of of minimum export price for single-use surgical instruments was also approved by the economic body.

"The ECC deferred the decision on Strategic Trade Policy Framework (STPF) 2020-25; however, it approved the formation of the National Export Development Board (NEDB) as requested by the Ministry of Commerce to facilitate economic outreach initiatives."

It also approved a number of technical supplementary grants.

Agenda of ECC meeting

There were 21 items on the agenda of the ECC meeting to be chaired by the newly appointed finance minister.

Commerce and Textile divisions had submitted five crucial summaries for approval besides others, sources had earlier told Dawn.

At the agenda no. 16, the Textile Division summary sought permission from the ECC to lift ban on import of cotton and cotton yarn from India in a bid to bridge raw material shortfall for the value-added textile sector.

In addition to this, another summary of the commerce ministry at agenda no. 20 also sought permission to allow import of white sugar from India through the Trading Corporation of Pakistan and commercial importers.

The resumption of import of these goods will lead to partial revival of trade relations. On Aug 9, 2019 Pakistan downgraded trade relations with India in reaction to the latter's decision to revoke Article 370 of its Constitution that granted occupied Kashmir a special status.

In May 2020, Pakistan lifted the ban on import of medicines and raw material from India to ensure there is no shortage of essential drugs amid the Covid-19 pandemic. This was the first step of reversing of complete suspension of trade with India.

Previously, cotton, yarn and sugar imports were allowed from all countries except India.

Prime Minister Imran, who is also Minister-in-Charge of Commerce and Textile, has already approved the summaries to be placed before the ECC for approval. It means that the prime minister is already in support of lifting the ban on these products imports from India.