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LAHORE: Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) Chairman Abdur Razaq Gauhar, while hailing the government’s decision to impose ban on import of luxury cars and consumer goods, also called for halting import of auto parts in the country, as banning the import of those products which are being made locally can aid in averting the looming threat of default.

The PAAPAM chairman said that Pakistan can easily save billions of dollars by controlling the under-invoicing and smuggling of tyres and parts of motorcycles, cars and tractors.

Amidst grave uncertainty and severe pressure on sharply melting foreign exchange reserves, the government will have to expand this move of national importance by including the locally made auto parts in the negative list, as the import bill of auto parts is as high as Completely Built Units (CBU) and completely Knocked Down Units’ (CKD) Import Bill, which is not only dangerous for the local auto industry but also eroding the foreign exchange reserves, he said.

Moreover, the rising food imports and the consequent trade deficit is yet another source of worry for the nation. Pakistan spent over $ 8 billion on the import of edible items in the last fiscal year which needs to be tackled by promoting farm mechanization with the support of auto industry.

The food import bill rose by almost 16 percent to US seven billion dollars in nine months of FY22. Main reason of gap in food production is slow farm mechanization in the country. Major focus shall be to support the tractor manufacturing industry that is being denied the sales tax refunds of over Rs 8 billion since more than one and a half years. Crunch in working capital due to withholding of Sales tax refunds would soon result in unemployment and food security threat to the country.

He said that the tractor is a basic machine for farm mechanisation and is required for plowing, irrigation, and transportation from farm to market. So, isn’t it better to support the agro-mechanisation instead of importing edibles later and giving much higher subsidies on it.

PAAPAM is of the view that the real value of the imported auto parts is much higher than the declared values due to massive under-invoicing and smuggling. The government is requested to protect the local industry and national treasury from the damage caused by under-invoicing and smuggling.

It is a very genuine demand of the industry to take effective measures for curbing the smuggling and improving the competitiveness of the local industry by ensuring promotion of localization in the country.

We are spending huge foreign exchange on the import of auto parts despite the fact we are producing them locally. PAAPAM chairman argued and appealed to all government institutions, including the defense institutions, Railway and Wapda to replace their aftermarket needs with the “Made-in-Pakistan” products.

Meanwhile, Pakistan Footwear Manufacturers Association also lauded the federal government initiative to impose an immediate ban on the import of luxury goods as one of the major preventive steps to forestall the looming default and control spiraling hike in dollar price against rupee.

In a statement issued here, Chairman Pakistan Footwear Association Zahid Hussain said that the long-awaited but much-needed step under taken by Prime Minister Shehbaz Sharif would help in saving the precious foreign exchange besides arresting hike in dollar price. The ban on import of footwear would gear up local manufacturing and it will also generate more employments in the country.

However, Zahid Hussain called upon the Prime Minister that the shipments which are enroute and their LCs (Letter of Credit) have been opened according to the bank record before May 19, they may be given one time exemption from this ban so that they are cleared on the ports without any delay.

The chairman further said that the decision to ban import of luxury items will save the country’s precious foreign exchange while austere and financially stronger people must lead in this effort so that the less privileged do not have to bear this burden.

Copyright Business Recorder, 2022


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