Sialkot is known for being an SME and export hub. Its contribution to Pakistan's total exports stands at around $1.5 billion annually. Among the host of other items the district has to offer, three of the most obvious exports in its arsenal are surgical instruments, sports goods, and leather products. Today, this column explores Sialkot's surgical instruments industry.
Pakistan's surgical goods are considered among the most economical in the world and they comprise of an extremely diverse assortment. According to the Surgical Instruments Manufacturers Association of Pakistan (SIMAP), the world market is estimated at $30 billion.
Surgical goods and medical instruments form over 1.7 percent of Pakistan's aggregate exports. The segment has seen slow growth over the past few fiscal years. As of the most recent month of April, exports of surgical goods and medical instruments were north of $35 million - a growth of 13 percent year-on-year and 7 percent month-on-month.
SIMAP Secretary General Muhammad Amjad spoke to BR Research, highlighting the various problems plaguing the industry. He said that the most pressing concern was the issuance of regulatory duty of 15 percent on the import of raw materials.
Moreover, Amjad said that the industry was previously zero-rated in tax. However, the government of the day introduced a sales tax of 2 percent last year and now intends to up this figure to 5 percent in the coming fiscal year. Other issues that were mentioned were the shortage of skilled labour and the energy crisis.
Nevertheless, Pakistan's surgical instruments industry holds immense potential. As Amjad said, "there is no industry like ours anywhere else in the world."
Perhaps the government should not tax SMEs and cottage industries in the name of generating more revenue. Import duties also need to be cut; stepping on the little guy isn't going to help anyone.
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