Auto parts makers fear halt to development

Auto parts manufacturers have warned the government that the imposition of proposed 15% customs duty in the upcoming budget for fiscal year 2025-26 will hurt the industry's development process and its overall competitiveness.

They have called for withdrawing the proposal and giving more protection to the industry.

Auto industry players took up the matter during a meeting headed by Special Assistant to the Prime Minister on Industries Haroon Akhtar Khan, which discussed tariff issues.

Industry stakeholders pointed out that the government was collecting 56% of revenue from industries, which provided jobs to the local people.

The government is formulating the budget in consultation with the International Monetary Fund, which wants a substantial increase in revenue collection. During the entire process, all industries are concerned about the rise in tariffs on different products.

One of them is the auto industry, which is afraid of imposition of 15% customs duty. Car prices are already high in Pakistan and the customs duty will lead to a further price hike, which can hurt auto sales.

"How much protection the auto industry needs," asked Haroon Akhtar during the meeting. He told the industry to provide a report by the weekend, explaining how much protection they required and why, sources said.

Carmakers agreed in every auto policy that they would implement a 100% deletion programme but have so far failed to meet the commitment. Most of the auto parts are still imported; therefore, a 15% duty will push car prices higher.

According to a statement, Haroon Akhtar emphasised that grievances of the auto parts industry would be presented to the Tariff Policy Board. He directed the Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) to provide a detailed analysis of the required level of protection to remain competitive and sustainable.