KARACHI: Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) on Monday said that after the signing of recent agreements between India and Pakistan to answer non-tariff barriers (NTBs) in India, auto parts makers still believe they need more time to gain strength to compete India’s strong auto industry.
“Local auto parts makers are still a nascent industry. And, they will be hurt significantly if Pakistan allows liberalisation of trade with India in the near future,” Paapam Chairman Munir Bana said while speaking to The Express Tribune.
The newly appointed chairman said that the government should maintain a sensitive list with India for at least 10 years before considering any reduction in tariff lines.
The demand for more time, from Paapam, comes at a time when Pakistan is expected to abolish the negative trade list with India by end of this year. Auto industry – a leading industry of Pakistan – had strong reservations in this regard.
Paapam in a press release on Monday also said that Pakistan’s auto industry was not prepared for phasing out the negative list.
There is ambiguity surrounding this because it will be very difficult for both governments to establish whether all the NTBs had been removed before Pakistan phases out the negative list in the next two months. Right now, both governments were collecting data regarding the complaints on NTB’s, which obviously takes time.
In response to a question, Bana said that NTBs was a big issue because the complainant will have to prove government that the local industry had direct repercussions with trade liberalisation.
Indian High Commissioner to Pakistan Sharat Sabharwal talking to businessmen in Karachi earlier said that his government would do everything possible to remove the concerns of Pakistani businessmen regarding the trade barriers.
Despite reservations from auto sector, the stance of the government was clear that the negative list will be phased out by December 31, 2012.
Auto Industry analysts say that auto parts makers were more vulnerable than the automakers like Pak Suzuki, Indus Motors and Honda.
Published in The Express Tribune, October 23rd, 2012.