Items not used in Afghanistan: call for duty on imports under ATT can help curb smuggling

Pakistan can curb smuggling by imposing duty on all those items imported under the Afghan transit trade (ATT) whose consumption in Afghanistan is negligible because of non-existing of industry and are smuggled into Pakistan.
"If Afghanistan does not have textile industry, why the parts to be used in this industry are being imported under the Afghan transit trade, "said newly elected member of the board of directors of the International Federation of Hardware Association Usman Ghani here on Tuesday.
Usman Ghani, who is former Central Chairman of Pakistan Hardware Merchant Association, talking to Business Recorder, said: "The import of every item, whose consumption did not exist in Afghanistan was totally unjustified and needed to be immediately stopped.
He said the Pakistan government should conduct a comprehensive study on the import of all those products, goods and parts under the Afghan transit trade whose consumption did not exist in Afghanistan. The government should hold dialogue with the Afghan government to make it agree on the imposition of import duty on such items, he added.
To check the smuggling, Nepal-India model was already available, which could also be applicable in Pakistan, he said, adding that this would not only help flourish local industry, but would also help generate substantial amount of revenue to the national exchequer.
Usman Ghani said the hardware was a cottage industry and located in the cluster areas of Gujranwala, Sialkot, Wazirabad, Daska, Gujrat, Sheikhupura and Lahore. Referring to the houseware items, like sanitaryware, cookingware and agri-machinery parts, he said this industry was facing pressure and reached the verge of total collapse due to heavy electricity tariff, gas and power shortage, law and order, and discriminatory attitude on the part of government departments and the banks also.
He regretted that not a single policy was announced to uplift this sector, which was considered backbone of light engineering, and added the local industry could not flourish because of lack of skilled manpower and technical know-how of the modern technology.
Usman Ghani said the governments had always attached their priorities to large scale manufacturing sector like textile, sugar and cement, while hardware industry was totally neglected. He recalled the local industry had been meeting 40-50 percent local demand, which was diminishing because of the influx of imported and smuggled items mainly from China.
"Gradually, the reliance on local industry is being diminished and now about 70 percent demand of the hardware items are met out of the imported and smuggled items. Not only the government, the banks also do not support this sector and provide loans at commercial rates," he said.
He also claimed that the Pakistan Steel Mills (PSM) products had been expensive as compared to the international market. When steel prices were moving around 700 dollars per metric tonne, the PSM steel rod price was Rs 80,000 per metric tonne and steel sheet Rs 85,000 per metric tonne. The unprecedented increase in PSM products forced the industry to shift its reliance on import rather than using local produce, he said.
The vocational training institutes also neglected this sector and did not introduce appropriate course in line with the modern technology, he said, adding: "We are in process of holding dialogue with the Punjab government so that Tevta courses can be upgraded in line with the modern techniques for producing skilled manpower in the country." To a question, he said the exact and accurate data with regard to imports in monetary term was not available because of large scale under-invoicing and smuggling.
He further pointed out that the European companies were outsourcing their demand for different kinds of parts from China because of the rising labour cost there. "They are shifting from China to other Asian countries, including Vietnam, Philippine, and Thailand. If the government provides support to the local hardware industry, it can make its place in the international market by providing same parts at competitive price," he added.