Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) has recommended the government that all auto parts and accessories should be included in the negative list of trade with India, as the imports from the neighbouring country will badly affect the local industry.
While addressing a press conference at Expo center Lahore during the Auto Show, PAAPAM Chairman Syed Nabeel Hashmi said, trade liberalisation with India is a sensitive issue and it involves a number of aspects. Therefore, before finalising the negative list, government should thoroughly check all negative implications it can have on different industries in Pakistan. PAAPAM, in its suggestions sent to the Ministry of Commerce made it clear, that if the restriction on imports of auto items will be lifted, business of local manufactures of auto parts would be adversely affected.
Indus Motor Company Chief Executive Officer (CEO) Parvez Ghias said, his company is not against the liberalisation of trade with India, “As PAAPAM has its serious reservations over the imports of ‘parts’, only the raw materials for the sector should be allowed to be imported from the neighboring country.”
Government’s decision to allow the import of vehicles under the completely knocked down (CKD) condition was also unjustified “Instead, the government should announce an income tax holiday for new investors or provide them with land on reduced rates,” he said adding that allowing new investors to import cars under the AKD condition at five per cent duty would hurt the business of local automobile manufacturers. He said Auto industry has no objection over the new entrants in the sector but it has serious reservations over the policy made for the new entrants.
Besides these problems, non tariff barriers (NBTs) imposed by India, were also creating hurdles for the Pakistani manufactures to export even those products which were competitive in the Indian market.
According Nabeel Hashmi, PAAPAM has the potential to meet the demands of the country’s auto industry and that there is no urgent need to import items from neighbouring countries. The dependence on local production will help the country’s auto industry. Auto parts industry currently employs 175000 persons at auto parts venders and over 8000 in various assembly plants, he said. Addressing the press conference, Engineering Development Board (EDB) CEO Etiazaz Niazi said that no one should be frightful about the new entrant policy to be made by the government as the government would frame the policy in the country’s own interest. He said that the country’s export of engineering goods was enhanced to at least $1.4 billion during the financial year 2011 and further increase was expected during the current fiscal year. While discussing the impact of fresh climatic change in Thailand, he informed that it could affect the local production of cars especially Corolla and Toyota. Recent floods in Thailand can potentially affect the production of auto industry in Pakistan as they could face short supply from foreign countries.
