The president of PAAPAM calls for a halt to the import of auto parts – Business & Finance
LAHORE: Abdur Razaq Gauhar, Chairman of Pakistan Automotive Parts and Accessories Manufacturers Association (PAAPAM), while welcoming the government’s decision to ban the import of luxury cars and consumer goods, also called for stopping the importation of auto parts into the country, importing these products which are locally produced can help ward off the imminent threat of default.
The chairman of PAAPAM said Pakistan can easily save billions of dollars by controlling the under-invoicing and smuggling of tires and parts of motorcycles, cars and tractors.
Amid severe uncertainty and severe pressure on sharply declining foreign exchange reserves, the government will need to expand this nationally important move by including locally-made auto parts in the negative list, as the import bill of auto parts is as high as fully built units. (CBU) and Completely Knocked Down Units’ (CKD) Import Bill, which is not only dangerous for the local auto industry but also erodes foreign exchange reserves, he said.
In addition, the increase in food imports and the resulting trade deficit are another source of concern for the country. Pakistan spent more than $8 billion on importing edible items in the last fiscal year, which needs to be addressed by promoting agricultural mechanization with the support of the automotive industry.
The food import bill rose nearly 16% to US$7 billion in the nine months of FY22. The main reason for the gap in food production is the slow pace of agricultural mechanization in the country. The main aim will be to support the tractor manufacturing industry which has been denied sales tax refunds of over Rs 8 billion for over a year and a half. Tightening working capital due to the withholding of sales tax refunds would soon lead to unemployment and a threat to the nation’s food security.
He said that the tractor is a basic machine for agricultural mechanization and is necessary for plowing, irrigation and transportation from farm to market. So, isn’t it better to support agro-mechanization instead of importing edibles later and subsidizing them much higher.
PAAPAM is of the opinion that the actual value of imported auto parts is much higher than the declared values due to massive under-invoicing and smuggling. The government is urged to protect local industry and the national treasury from damage caused by under-invoicing and smuggling.
It is a very real demand from industry to take effective measures to curb smuggling and improve the competitiveness of local industry by promoting localization in the country.
We spend huge foreign currency on importing auto parts despite the fact that we produce them locally. The PAAPAM chairman argued and called on all government institutions including defense institutions, railways and Wapda to replace their aftermarket needs with “Made-in-Pakistan” products.
Meanwhile, the Footwear Manufacturers Association of Pakistan has also hailed the federal government’s move to impose an immediate ban on the import of luxury goods as one of the key preventive measures to prevent default. imminent and control the surge in dollar prices against the rupee.
In a statement published here, Chairman of the Pakistan Footwear Association, Zahid Hussain, said the long-awaited but much-needed step taken by Prime Minister Shehbaz Sharif would help save precious foreign currency in addition to halting the rise of the price in dollars. The shoe import ban would speed up local manufacturing and also generate more jobs in the country.
However, Zahid Hussain appealed to the Prime Minister that shipments which are on the way and their LCs (letters of credit) have been opened according to the bank statement before May 19, they can be exempted once from this ban so that they are cleared. on ports without delay.
The President further said that the decision to ban the import of luxury items will save the country’s precious foreign currency, while austere and financially stronger people must lead this effort so that the less privileged do not not have to bear this burden.
Copyright Business Recorder, 2022