KARACHI - While inaugurating Pakistan Auto Show (PAPS), Federal Minister for Industries and Production Ghulam Murtaza Khan Jatoi has said that the government will support local manufacturers to increase export and help them grow to capture international markets.
Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) has organised a two-day Pakistan Auto Show (PAPS 2017) which is being held from March 3 to 5, 2017 here at the Expo Center.
Welcoming the international exhibitors who participated in this show, the minister said that this exhibition truly depicts the potential of the Auto Engineering Sector of Pakistan, which has played a major role in the economic growth of the country in recent years. This is evident from the phenomenal growth in the auto sector, which once again crossed the barrier of 218,000 automobiles in the previous financial year, he added.
The momentum will continue in the current year as well, he said and hoped that the auto industry will gear up to the new challenges ahead of them and wish them all the success in meeting these challenges.
While talking about the auto policy, he said as a consequence of the new auto policy announced by the government last year, many international automotive companies have decided to set up assembling plants in Pakistan. “The mega China Pakistan Economic Corridor (CPEC) includes projects for setting up of industrial zones and power generation plants along the entire route of the corridor which have already attracted direct foreign investments into our country,” Jatoi added.
Meanwhile, PAAPAM Chairman Mashood Ali Khan welcomed the minister and thanked him for applauding auto industry’s role in improvement of national economy. “Auto manufacturing is a fully documented industry that ranks amongst the top three taxpaying industries in Pakistan. However, the industry’s performance and growth is being threatened by a few issues that can be solved if the government shows more vigilance and commitment to the policy prescribed in the ADP 2016-2021 and execute investment plan accordingly,” he added.
The PAAPAM chairman said that they propose the following conditions to qualify for SEZ status under ADP: green field investment by global or domestic auto parts manufacturers and parts for engine, transmission, suspension, body, etc that have never before been produced in Pakistan for any auto assembler. He also highlighted the issues of Regulatory Duty (RD) which was imposed on steel two years ago when the prices of steel were low, but today international prices are constantly rising which makes it more difficult to bear the burden of RD.
“The new automotive development plan 2016-2021 has given tariff structures, and it is against the policy to modify its approved tariff structures by making the Levy of RD on raw material not manufactured locally,” he said.
He requested the government that all imports of raw material under SRO 655 be exempted from RD under SRO 568, as similar exemptions have been granted to other sector, Such as import under SRO 565, SRO 678(1)/2004. He also expressed concerns on Free Trade Agreement (FTA) with Thailand and Turkey. Citing the examples of FTA with different countries already in place which have not given benefits to the country, he said the Ministry of Commerce should come up with a specific mechanism for FTAs under negotiation and also take the entire industry on board.
He urged the government to follow footsteps of Japan, Korea, and other countries which prepared their trade policies like warfare strategies so that their local industries did not suffer and now their companies are among the top auto manufacturers around the globe.