Auto Industry: promotion of trade with India opposed

Mian Iqbal Hassan Convenor, Enginee-ring/Environmental committees (Multan Chamber of Commerce & Industry) has opposed the promotion of trade with India and declaring it most favourite nation describing it detrimental to Pakistan's industry and economy. Talking to newsmen here on Wednesday he said that a strong lobby in Planning commission has recommended the reduction in import duty on auto-parts from 35 to 10 percent in the guise of Euro-2 engine fitted vehicles to zero percent.
He said that it would be a big blow to the Automobiles vending industry and huge revenue loss to the government. It will also promote un-employment in the country. It is to be noted that the cost of doing business in Pakistan is extremely high and new industries are not coming up. The government wants to generate more revenue but on the other hand this lobby is asking for reducing duties.
Under these circumstances the existing vending automobile industries will automatically succumbed to this situation with closure of 1600 vendors and unemployment of more than 2 Lacs person. Tractors and motor cycle industry is geared up for indigenous production to more than 80 percent parts as per OEM standards. Pakistan is producing the cheapest motor cycles in the region and cheapest Tractors in the world.
In case of car industry the indigenously produced parts amount to 50 to 55 percent. Mian Iqbal Hassan said Pakistan's automotive vending industry had opposed the entry of automotive parts from India for use in the assembly of vehicles here. He said that Pakistan government had introduced Automobile policy in 2005 and Tariff based protection (TBS) to promote the Auto Mobiles vending base vide SRO No 693 (1)/2006 dated 1st July 2006, but this lobby did not allow to function and no addition in its parts deletion list which was based on 1998 locally produced parts list.
The EDB is fully aware of these facts. He said liberalising the automotive parts' trade with India would have negative impacts on the vending industry of Pakistan. The protective environment currently enjoyed by the Pakistani automotive parts industry should not be withdrawn because it would lead to a major vending industry shake up.
There will, inevitably, be losers and this needs to be thought through in calculating the benefits of opening up to India. He stated that Pakistan's automotive parts industry has seen remarkable growth in the last ten years under the present trade policy and local market conditions.
However, the liberalisation of broad economic relations with India will present new opportunities but also some challenges. Furthermore, there is the perceived risk that India's strong technology base may create one-way trade and may harm local industry, especially the small and medium manufacturers who are just finding their feet.
He appealed to Prime Minister to intervene into the matter for the survival of local vending industry and allow protection vide SRO .No 693 an per recommended by the EDB in its Auto Industry Development Committee (AIDC), which was unanimously agreed by all the quarters of Auto Industries, including PAAPAM and PAMA. Mian Iqbal Hassan said that China is proving export incentives from 14 to 29.7 percent and India has fixed export incentives.