Indigenous production: ‘Good policy on chemical industry can facilitate import substitution’

LAHORE: Speakers at a panel discussion said that prudent chemical industry policy can help import substitution through indigenous production, thus saving the precious foreign exchange of US 14 billion dollars.

The panel noted that the fundamental problem in our overall structure is that we are lacking value addition; hence, imports need to be categorized under imports for basic consumption, imports for local value addition and imports for exports.

The panelists emphasised that imports for exports should be facilitated and the government should prefer industrialisation over trade with providing 5 to 10 year plans.

The panel also discussed why exports are not increasing at par with imports and a possible reason is that utilities are expensive which make local industries uncompetitive.

Cost of doing business is ever increasing and conventional ways of exports along with limited value addition are hampering exports, the panelists reasoned.

It may be noted that Pakistan has been importing chemicals worth $ 14 billion which is 18 percent of the total imports and second biggest after fuel imports.

Chairman PCMA Jahangir Piracha was of the view that chemicals cover everything from APIs to fertilisers, therefore, Pakistan needs direction for import substitution.

Chairman ATS Group of Industries Anjum Nisar said that they are not exploiting our natural indigenous resources though it is quite clear that industries will flourish only when it is viable to invest.

Chairman Descon Group Taimur Dawood said that the chemical industry does not have excess capacity to export.

“Tariff rationalisation is a big issue and the government will have to give a consistent and predictable policy for the chemical industry to grow”.

Copyright Business Recorder, 2022