EDB to move for declaring Sialkot as EPZ: AIDP implementation to be reviewed

The Engineering Development Board has decided to review implementation of Auto Industry Development Plan (AIDP) and take up the matter of declaring Sialkot city as export processing zone (EPZ). The EDB is among those selected state-owned enterprises, which require massive restructuring under the Industrial Policy 2011 to minimise operational losses.
After its restructuring, EDB would acquire the nomenclature of 'Industrial Development Board', to more accurately reflect its new mandate. These state-owned enterprises have become a cause of regular addition to non-development expenditures of the government, while corruption is adding fuel to the fire, as reported in the June issue of /Industrial Bulletin', EDB's in house journal.
The overall implementation progress of AIDP will be reviewed to figure out how much progress has been made on the targets fixed in the plan. Under the AIDP, the auto industry was required to achieve localisation of certain parts by 2010, and tariff of those parts was to be increased from 32.5 percent to 50 percent. These parts were not localised during the past four years.
AIDP was prepared in 2007 with a pre-announced structure of five years to allow investment in the auto sector for the development of the industry. It was aimed at facilitating industry's integration into the global supply chain by maximum indigenisation. The envisaged localisation of parts under the plan was that car manufacturers would transfer technology and know-how to the vendors for manufacturing of alternators, starter motors, water pumps, fuel pumps, fuel filters, seat reclining, power steering, engines and transmission.
According to 'Industrial Bulletin', the progress on localisation is very dismal due to many factors, including global slump in the auto sector. At a recent meeting of the Auto Industry Development Committee (AIDC) it was decided to take up the matter about the future of Tariff Based System (TBS), part of AIDP, in the next meeting in the light of detailed discussion and consultation with all stakeholders.
The government, the 'Industrial Bulletin' reported, may declare Sialkot city as export processing zone (EPZ), which would help organise the informal sector of economy, and increase exports. The EDB has decided to take up the matter with the Ministry of Commerce for finalising a proposal in this regard.
The industry would get benefit in the form of exemption in taxes and duties on import, and the government would be able to document the informal sector by declaring Sialkot as EPZ. Pakistan's annual surgical instruments exports amounted to around $240 million in 2009-10 which, the surgical instrument manufacturers hope, would increase in the current fiscal year.
The EDB has calculated that the exports of surgical instruments could be increased to $500 million in two years and ultimately touch one billion dollars in five years time. To achieve this target, it is important to move towards branded products and promote these in international markets.
The bulk of surgical instruments industry is situated in Sialkot, but majority of manufacturing units are unorganised and are operating as cottage industry. Some unregistered units and some small and medium enterprises are also operating in the city and the government's focus is on organising and facilitating them to increase the quantum of surgical instruments' exports.