LC resumption process key to reopen vehicle imports from Japan: industry veteran

By Sanath Nanayakkare

Jagath Ramanayaka at Sri Lanka Automobile Exporters Association in Japan says that even if Sri Lanka lifts the ban on vehicle imports, it will take a considerable period of time for the banks in Japan to resume the acceptance of letters of credit (LCs) issued by Sri Lanka.

Speaking to Hiru TV recently Ramanayaka said,” It would be difficult to develop an economy without importing new vehicles. For example, the tourism industry needs new vehicles to transport the tourists to the destinations they want to visit safely and conveniently. There is a dynamic relationship between sustainable transportation and tourism to economic development. If something unfortunate happens as a result of the condition of a tourist vehicle, it would bring disrepute to our tourism sector and to its good image. Other countries that faced a similar situation have allowed the importation of vehicles.”

“During the pandemic period, our letters of credit which had been sent to Japan were immediately suspended by the government of Sri Lanka. Thus letters of credit coming from Sri Lanka were annulled forthwith without any proper prior notification. So even if the vehicle import ban is lifted, a lot of vehicles won’t be coming to Sri Lanka because of this notification given to the banks in Japan. It will take a long time for smooth imports to take place.”

“The import of electric vehicles can’t be done so soon. This shift has to take place on a staggered basis. If we try to do it far too soon, we will experience the same hardship that we faced when the authorities decided to impose a ban on chemical fertilizer imports and switch to organic fertilizer overnight. So, transition to electric vehicles should be done gradually within a period of 5 to 10 years.”

“I deal with 50-60 countries as an automobile dealer. They have properly laid out constant tax policies. Governments in the past suddenly announced new tax policies within 24 hours. In Japan, when the government decides to bring in new tax policies, they inform the industries and the general public well ahead of the enforcement of such policies to ensure the smooth operation of the market. Sri Lanka also has to follow such firm and robust frameworks to allow business confidence to remain in place and also some certainty in doing business in the country,” he said.