Auto parts, cellphone export potential untapped
Pakistan can become an export hub for auto parts, mobile phones and electrical appliances, noted Federal Minister for Industries and Production Syed Murtaza Mahmud while commenting on the cooler economy amid the flood situation.
“Pakistan has untapped potential in exports to important destinations such as China,” he said.
Pakistani government had imposed a ban on the import of more than three dozen non-essential and luxury items on May 19 as part of an emergency economic plan to stabilise the depleting foreign exchange reserves and rising import bill.
As per former federal minister for finance and revenue Miftah Ismail, the decision helped contain imports in a way that the trade deficit dramatically shrank during the current fiscal year.
Referring to this, Murtaza Mahmud noted “the short-term measures taken by the finance ministry were for a brief period, in which they discouraged the import of parts for the auto sector, mobile phones, electrical equipment and electrical appliances, but things have improved a lot now. Letters of Credit (LCs) and other issues have been sorted out.”
A few months later, the ban was lifted as demanded by the International Monetary Fund (IMF), but restrictions on the import of completely built-up automobiles, mobile phones and home appliances remained in place.
“I think there is a lot of potential for mobile phone exports from Pakistan, and electrical appliances as well. The government is working on it,” he said, adding that the ministry is engaged with the mobile phone sector to figure out supportive policies.
The remaining ban has also forced two leading car assemblers, Toyota and Suzuki, to plan partial plant shutdowns due to the unavailability of raw material.
“There is no doubt that the current situation has created difficulties for the auto sector. Our trade deficit was huge, the finance ministry focused on the auto sector and mobile phones, as we wanted to reduce our imports,” Mahmud pointed out.
Unless the country goes towards localisation and export of auto parts, these issues will not be addressed, he believed.
“We will continue to face this issue until we move towards localisation and we start making auto parts,” the minister told CEN.
The article originally appeared on the China Economic Net
Published in The Express Tribune, October 14th, 2022.
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