LAHORE -  During the process of preparation of Automotive Development Policy (ADP) for 2016-21, government promised with Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) of providing Special Export Zone (SEZ) incentives for investment in local production of high technology parts including body, engine, transmission and suspension. However, the announced ADP did not contain any incentive for auto parts manufacturers. This incentive is critical to support localisation of remaining 30 percent automobile parts that are still being imported by auto assemblers.

These views were expressed by PAAPAM Senior Vice Chairman Saeed Iqbal Khan while talking to Senate Standing Committee on Industries & Production Chairman Senator Hidayatullah, who visited Pakistan Association of Automotive Parts & Accessories Manufacturers Head Office at Lahore along with other members of the committee.

Khan informed the delegation that currently the Ministry of Commerce is negotiating Free Trade Agreements (FTAs) with Thailand, Turkey & China. PAAPAM believes that the automobile parts manufacturing sector, which is undergoing recovery after 8 years of stagnation, will be deeply damaged by these (FTAs).

Muhammad Saleem informed the committee that a discriminatory Regulatory Duty at 30 percent has been levied on raw materials imported by the auto parts manufacturers, whereas the imports of finished parts are not subject to RD. Hence competitiveness of the domestic industry has been severely compromised. It is not understandable why these steel products have been kept out from the ambit of SRO 655(I)/2006 available to Auto Parts Vendors.

He said that there is urgent need of revamping customs valuation system of imported auto parts which is being done in KGs instead of Units due to which finished products are cheaper than its imported raw material.

Adil J Mansoor stressed on the need of strengthening the role of Engineering Development Board enabling it to play its assigned role for the development of auto industry and safe guarding the interests of all stakeholders.

In the end, PAAPAM sought valuable support from the Senate Committee to approach the finance minister, minister of industries, minister of commerce, BOI chairman and Board of Revenue chairman on these issues. Senator Hidayatullah assured that they will support the cause of auto parts manufacturers.