The Economic Coordination Committee (ECC) of the cabinet has approved higher additional customs duty on imported tyres and motorcycle parts. The duty on radial tyres will rise from 4 percent to 11 percent. Moreover, the duty on motorcycle parts will increase from 11 percent to 31 percent. Finance Minister Muhammad Aurangzeb chaired the meeting on Thursday.

The committee said the increases aim to promote domestic manufacturing. According to an official statement, the decisions apply to tyres and motorcycle parts produced locally. Therefore, imported products will face higher costs at the border, which could push up prices for buyers.

The ECC also approved a State Bank of Pakistan financing framework. It aims to expand access to credit for small and medium sized enterprises, small farmers and medium sized industries. Eligible microfinance and nonbank financial institutions will deliver the loans.

Under the framework, first loss coverage will apply to up to 20 percent of loans to small and medium sized enterprises. Meanwhile, small farmers and medium sized industries will receive coverage of 10 percent each. Furthermore, the arrangement involves wholesale and agency arrangements with Agency Financial Institutions. The government hopes this will broaden access to financing.

Additionally, the committee approved an amendment to the Credit Guarantee Trust Fund. The change expands the use of an existing credit guarantee facility for affordable housing finance. The fund was originally set up for the prime minister’s Mera Pakistan Mera Ghar scheme.

Still, the customs duty increase may affect consumers more directly than the financing measures. Finally, buyers of imported tyres and bike parts should watch for price changes in the coming weeks.