Engineering Development Board (EDB) has reportedly opposed the removal of six Complete Knock Down (CKD) spare parts from the India-specific negative list on the plea that auto industry is unwilling to support the proposal; sources close to Secretary Industries told. The issue will be discussed threadbare in the meeting of Auto Industry Development Committee (AIDC) scheduled to be held later this month.
The committee will also discuss a few other issues related to auto sector. PSMC is the largest assembler of vehicles in the country, operating under a Japanese management and supporting trade with India because the company claims to be committed to expanding its vehicle production in line with market demand.
Giving details, sources said EDB has received a representation from M/s Pak Suzuki Motor Company Limited, Karachi, through Ministries of Industries and Commerce for allowing the import of 6 HS code, having CKD parts only, by removing them from the negative list of items importable from India. The items are as follows:
(i) components for the assembly/manufacture of vehicles for engine capacity not exceeding 800cc car;
(ii) components for the assembly/manufacture of vehicles, for engine capacity exceeding 800cc but not exceeding 1000cc car;
(iii) components for the assembly/manufacture of vehicles, for engine capacity exceeding 1000cc but not exceeding 1300cc car;
(iv) components for the assembly/manufacture of vehicles, for engine capacity exceeding 1300cc, but not exceeding 1500cc car;
(v) components for the assembly/manufacture of vehicles, for mini-van engine capacity exceeding 800cc but not exceeding 1000cc car; and
(vi) components for the assembly/ manufacture of vehicles, for pick-up G.V.W not exceeding five tons.
M/s Pak Suzuki Motor Company Limited has also informed the Ministry of Industries and Production that its proposal has been supported by M/s Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM).
According to M/s Pak Suzuki, the company does not desire any change in duty structure for import of CKD parts from India. Specifically, import duties of CKD parts and A-max parts under SRO 656 and SRO 693 should remain the same whether import is made from Japan or India or any other country.
The benefits highlighted by M/s Pak Suzuki are lower costs of CKD, introduction of new models, technology transfer/ joint ventures in parts manufacturing and possibility for exports. The EDB is of the view that the PSMCL proposal is not specific to the vehicles of M/s Pak Suzuki Motor Company Limited, as quoted HS codes are universal for all vehicles. Hence removing of these HS codes would imply opening up imports of aforesaid CKDs of all vehicles from India.
The EDB further argues that during discussion on trade with India held in the Ministry of Commerce, auto industry insisted on inclusion of all auto sector related tariff line in the negative list to be gradually phased out within five years timeframe.
M/s Pak Suzuki Motors is the only Pakistani OEM which is overwhelmingly supporting trade liberalization between Pakistan and India. Other OEMs and PAAPAM have expressed grave concern on proposed liberalization of auto sector.
Commerce Ministry which is fond of trade liberalization with India is of the view that all India sensitive sectors will be protected. In the present circumstances, it appears to be difficult for the Government of Pakistan to move forward on this extra sensitive issue, said an analyst.
The World Bank will now monitor trade-related issues between Pakistan and India and for this purpose one consultant will sit in the Ministry. Earlier, consultants of USAID-funded projects monitored Pak-India trade matters.
-Published on page#21 August-2014 edition of MOBILE WORLD Magazine