Used tractor imports feared to hurt local industry

Tractor assembler says import will cause heavy unemployment

LAHORE: At a time when the local tractor industry has been going through its worst ever phase in terms of sales and production, the import of used tractors will prove highly detrimental for the domestic manufacturers.

Imports will also result in massive unemployment as the tractor industry will be wiped out of the country, which is against the government's agenda of generating employment.

These concerns were expressed by Al-Ghazi Tractors Chief Executive Officer Mohammad Shahid Hussain in a statement on Monday. The company produces New Holland tractors in Pakistan.

"Recently, the government of Punjab recommended some policy change to allow duty and tax-free import of used tractors of up to five years old," he pointed out. "This comes as a complete surprise because it is a contradiction to the direction in which the federal government is headed."



He added that the past four to five months proved to be terrible for the local tractor industry when it faced one of the lowest trends in the past few years, which resulted in considerable under-utilisation of capacity.

Listing the drawbacks of tractor imports, he pointed to the outflow of foreign exchange and reduction in the local industry's contribution to the exchequer, which currently stood at Rs4.5 billion.

He voiced fear that the local parts manufacturing industry would also be adversely affected as tractor assembly needed 90% of locally manufactured components. Moreover, "this is set to directly lead to under-utilisation of local resources, less foreign investors' trust and loss of potential foreign direct investment in the manufacturing sector."



Shahid added that tractor was a vital machine for farmers and Pakistani tractors had proved their reliability as even 20 to 25-year-old models were still running in fields.

"This is because there is no dearth of spare parts of tractors and an excellent after-sales service is provided by the manufacturers throughout Pakistan," he claimed. "Therefore, if used tractors enter Pakistani market, the issue of spare parts will haunt the farmers."

Arranging spare parts for each variant of used tractors, which would be imported from around the world, would not be impossible, he suggested.