*Imports of Locally Manufactured Auto Parts Should Be Restricted to Protect Domestic Industry: Iftikhar Ali Malik*

Lahore, November 10, 3D Media: Former President of the SAARC Chamber of Commerce and Industry, Iftikhar Ali Malik, has called for restricting the import of automobile parts that can easily be manufactured in Pakistan, saying the move is essential to conserve valuable foreign exchange and strengthen the country’s domestic engineering industry.

In a statement issued here on Tuesday, he said that Japanese vehicles assembled in Pakistan contain 50 to 65 percent locally manufactured parts, while the local content ratio in Korean vehicles ranges between 20 and 25 percent and in Chinese vehicles between zero and five percent.

He pointed out that substantial quantities of automobile components that could be produced domestically were still being imported, resulting in an unnecessary outflow of foreign exchange.

Iftikhar Ali Malik warned that imports of completely built-up (CBU) electric vehicles and 100 percent completely knocked-down (CKD) kits for local assembly would lead to a significant outflow of dollars and adversely affect approximately 1,200 engineering industries involved in manufacturing automobile components.

According to him, these industries directly employ around 300,000 people and provide indirect employment to another 1.5 million workers.

He said countries across the world generally prioritise and protect their domestic industries by encouraging the use of locally manufactured components. However, he described Pakistan’s National Tariff Policy (NTP) as flawed, arguing that its tariff comparisons with other regional economies were based on inappropriate benchmarks.

He further observed that tariffs on completely built-up (CBU) vehicle imports in India, Thailand and Indonesia stand at 120 percent, 80 percent and 52 percent, respectively, whereas the new auto policy proposes a tariff of only 15 percent for Pakistan.

Iftikhar Ali Malik urged the government to introduce effective measures to protect domestic manufacturing, discourage imports of products that can be produced locally, strengthen the engineering sector, generate employment opportunities and conserve the country’s foreign exchange reserves.