Import of used tractors to hurt industries: PAAPAM

Association vows to persuade govt not to allow tractor imports

LAHORE: The managing committee of the Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) has decided to start its engagement campaign with the government to persuade it not to entertain the import of used tractors.

It was discussed at an emergency meeting of Paapam held on September 25 that discussed the impact of imported tractors on Pakistan’s industries, agriculture and employment.

They were of the opinion that tractor import would have a negative impact on the domestic industry, which consists of 300 auto part manufacturers, employing around 50,000 people directly and contributing to the national exchequer by paying taxes and saving foreign exchange by providing import substitution.



On average, the industry operates at a capacity of 75% in the five-year cycle as demand fluctuates based on crop yields and market prices.

The industry posted growth in the last two years due to the support to farmers by the previous government in the form of fertiliser subsidy and interest-free loans among other measures. In the past 10 years, the industry witnessed two downturns - once due to the imposition of general sales tax (GST) and then due to drop in market prices and weather impact.



Consequently, neither the used imported tractors will go in favour of the farmers, nor the quality of these tractors can be ensured and their after-sales service will also not be possible due to unavailability of trained staff and spare parts.

The parts used in after-sales service will also have to be imported, putting further pressure on the Pakistani rupee, they said.

Imported used tractors would mean after-sales service issues for farmers, loss of business, closure of tractor part manufacturing units, loss of revenue to the Federal Board of Revenue (FBR) and flight of foreign exchange.

Pakistan exports three to four thousand tractors due to their attractive price and quality. Tractors being manufactured in Pakistan are well suited for the Pakistani agriculture needs, they said.

Published in The Express Tribune, September 27^th, 2018.

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