Demand to include auto parts in sensitive list

LAHORE: As the Commerce Ministry has again started consultations ahead of phasing out of negative list with India at Dec end, the Chairman of Pakistan Association of Automotive Parts and Accessories Manufacturers PAAPAM, has recommended to the government that all 65 items of auto parts should remain in Pakistan’s Sensitive List for trade with India.

PAAPAM chairman, Munir Bana, and vice Chairman, Usman Malik, stated that ending of Negative List, before providing level playing field to the Pakistani auto parts manufacturers APMs, will cause grievous harm to the local industry, which is hit by prolonged electricity shutdowns, gas interruptions and skyrocketing energy tariffs.

They stated that if the restriction on imports of auto parts are lifted, business of local manufacturers would be adversely affected, turning Pakistan into states like Sri Lanka and Bangladesh, which have no auto industry base, mainly due to huge influx of used cars imports from India. They added that the Ministry of Industries has already admitted that Pakistan’s domestic industry was in a gross comparative disadvantage position in terms of energy and access to credit.

“Numerous industrial zones in India offer concessions to promote the industry while in Pakistan there are frequent and prolonged energy outages, and the production capacities remain unutilized across the board increasing the production costs for the majority of those SMEs who do not have resources to set up captive plants,” they pointed out.

The PAAPAM leaders said that the auto industry was already facing a steep decline in production and car assemblers and APMs had retrenched thousands of workers because of continuing imports of used cars. He said that countries like India, Thailand, Malaysia and even Japan protect their local industry by imposing heavy duties to discourage imports.

Munir Bana hoped that auto industry would revive at the earliest, in the light of Government’s sagacious decision to restrict import of used cars, as this facility was being misused to the detriment of national interest.

Usman Malik said that auto industry welcomed trade liberalization with India but it has some reservations about import of certain finished products which are also produced in Pakistan. If country imports finished products, the growth of local industry will come to a halt, he claimed. However, we support the import of machinery and raw materials but do not want Pakistan to become a market for Indian finished goods, as India should not be allowed to use Pakistan as a dumping ground for its cheap and substandard goods, he added.

They concluded that PAAPAM wants manufacturing based trade with India, and fully favors collaboration and technical assistance with India’s hitech auto part manufacturers, which will be in the mutual interest of both countries.