Pak widening trade deficit can be restrained through import deletion; PAAPAM

by index360

Lahore: The Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) has asked the government to give the export industry status to the local vending industry, which is fully capable of bridging the huge gap of ever-rising trade deficit not only through enhancing exports but also controlling unbridled imports through ‘import deletion’ of industrial replacement parts.

In a letter, written to the Federal Minister for Industries and Production Hammad Azhar, the association has asked the government that there is a huge possibility of ‘import deletion’ of industrial replacement parts, in addition to the automotive parts, through public-private partnership (PPP).

“Through ‘import deletion’ we can minimize our dependence on imported goods by using reverse engineering technology in Pakistan under public–private partnership in line with the Chinese model, preventing the rapid outflow of billions of dollars spent on imported merchandize,” said Convener Business Development Committee PAAPAM Mirza Sikander Baig in the letter.

He observed that the government would have to consider this vending industry at par with the export industry in terms of support and concessions, providing it the same export sector’s incentives of concessional power and gas tariffs along with soft loans on zero interest rate.

“With a view to lessen the import bill of the country, the government, in collaboration with the vending industry, will itself have to take the ownership under a long-term public-private partnership, sharing both cost and obligation for the successful implementation of ‘import deletion’ plan”.

For this the government will have to amend the PPRA rules too, incorporating new clauses of taking full responsibility and risk sharing under the joint venture with the vendor industry,” Baig suggested.

Chairman PAAPAM Abdul Rehman Aizaz pointed out that concept of import deletion is, that in addition to focusing on exports to earn foreign exchange, the focus should also be made on local production of such goods which consume our major chunk of import bill.

He said that the manufacturing of such items at local level would ultimately delete these products from our import bill, leading to a significant drop in ever-soaring trade deficit of the country, which is the foundation of prosperity and economic development of a nation.

Senior Vice Chairman PAAPAM Abdur Razzaq Gauhar was of the view that major chunk of our import bill consists of engineering goods and machinery parts, as Pakistan imports billions of dollars’ worth industrial machinery and other spare parts and if they are produced locally and deleted from the import bill along with increase in exports the country can achieve the target of trade surplus like the developed countries.

Gauhar observed that the PAAPAM, having more than 600 SME units and involved in production of automotive parts, can do this by implementing reverse engineering technology. The primary role of this vendor industry is import deletion in line with the government vision and policies. Additionally, our members also cater to the needs of the domestic and foreign after market sectors.

The collective product range of our vendors is an impressive mix of metal, rubber, plastics (TPR, TPE, PPE etc., etc.) parts. “Over the years this vendor industry, besides serving the automotive OEM sector in Pakistan, has acquired the invaluable capabilities of reverse engineering. This is a great national resource for import deletion when put to use for other sectors in addition to the automotive sector including Defence, Railways, SSGPL, SNGPL, Wapda and OGDC etc,” he pointed out.

“This may give our members an opportunity to save some valuable foreign exchange for the country and also put their excess capacities to a valuable end, as “a dollar saved is a dollar earned”.

Vice chairman PAAPAM Mr Irfan Qureshi added that Pakistan Railways has also a long list of critical parts that is on their import list which can easily be replaced by local vending industry saving millions of dollars to the exchequer.

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