Local tiles manufacturers have asked the government to remove anomalies in Import Trade Price (ITP) for imported tiles to save local tiles industry from complete destruction.
“The tiles are being imported at low rates, while the ITPs have been decreased instead of increasing from 2010 to 2015. This situation has reached a point where it is playing havoc with the local industry,” a spokesman of Pakistan Ceramic Tiles Manufacturers Association (PCTMA) said on Sunday.
The spokesman said majority of the raw material necessary for the production of tiles was available in Pakistan which helps save precious foreign exchange and was providing jobs and business opportunities to over 10,000 people. The industry was not asking for undue favours but just logical implementation of correct valuation, he added.
He said that all the cost indicators like wages, transportation and energy costs were increasing in China and other countries, but surprisingly the ITPs had been decreased. It is to be noted that ITP for Iran was fixed in March 2014 while further 20pc discount on ITP was given on Iranian and Middle Eastern tiles in December last.
Moreover, at the time when under invoicing and mis-declaration of imported tiles is already rampant, the low ITPs are adding to the woes of the local industry. A large gap between the original price and ITPs of different sizes of ceramic and porcelain tiles is inflicting huge revenue losses not only on the local industry but the government as well.
“Last year a major manufacturer from the ceramic industry had to shut down its plant due to losses. So, the time has come that strict measures should be taken to address these issues which are playing havoc with the industry which provides livelihood to more than 10,000 families,” he suggested.
Furthermore, the influx of Chinese tiles, of which already lower ITPs fixed by the government under FTA with China has further encouraged their imports giving a heavy blow to the local tiles manufacturers. China produces 5200 million square meters of tiles yearly of which 584 million square meters are exported.
“Last year 15 million square meter tiles were imported from China. The government therefore should exclude the tiles from the Free Trade Agreement (FTA) with China which is being renegotiated,” he requested.
The spokesman added the product tiles were placed in “No Concession” category while signing FTA with China on the request of the local industry but unfortunately few PCTs relating to tiles were inadvertently included in category-IV.
Due to this discrimination and erroneous treatment, tiles importers took full undue advantage and circumvented duties and taxes during last six years. This backdoor is still open and the importers are routing most of their imports through PCTs which appear on the concessional category of FTA.
He said the cost of production was rapidly rising in China and their minimum wages were three times higher than Pakistan. “Under this scenario it seems illogical that the prices of tiles could go down in China whereas the ITPs of Chinese tiles have reduced from $4.57 per square meter in 2011 to $2.51 in 2013.”
Making ceramic and porcelain tiles part of FTA with China shows the ignorance of the policy makers about the potential of the local industry that has invested Rs 40 billion so far. The tile production capacity in Pakistan is over 60 million square meters while capacity utilization is far below due to influx of smuggled tiles and abnormally low ITPs. A study done by the National Tariff Commission also indicated that there was serious injury to the local industry and dumping duty should be placed on tiles from China.
He appreciated the ministry of commerce for taking input of the industry while negotiating the second phase of FTA with China and expressed hope that it would take appropriate action to protect the local tile producers.
