LED industry urges government to stop influx of smuggled, unregistered products

The local light-emitting diode (LED) lights manufacturing industry has called upon the government to stop influx of smuggled products and unregistered companies to protect the tattered domestic market.

The industry shared its concerns with the Engineering Development Board (EDB) and other stakeholders at a meeting held here on Tuesday under the chairmanship of Chief Executive (CEO) EDB.

The EDB CEO said that under the present government's "Make in Pakistan" strategy, work is underway towards enabling engineering sector for import substitution, and developing a competitive eco-system for the industry to be able to compete in the international market. In this regard, he said the government would like to support the LED industry in technology acquisition and standardization/certification to become one of the major export sectors for the national economy.

The members of LED lights Association underlined the need to address the issues of influx of products in Pakistan through gray channel. They said that such unregistered companies are becoming a challenge in local market in competition with organized sector manufacturers' who are market leaders of the LED lights. They import sub-standard and hazardous products which they sell at lower prices in market as compared to local manufacturers. Such companies are proliferating as the majority of consumer is price conscious rather than quality. Furthermore such companies do not pay duties & taxes to FBR resulting in loss of revenues to the government. The government is requested to take corrective measures to ensure that such imports are discouraged in order to not only protect the local industry but ensure consumer protection.

The matter of QR code for genuine and tested products from NEECA also came under discussion to bar unregistered companies and sub-standard products from market.

The representative of OSAKA informed about a serious anomaly that parts and components for local manufacturing LED lights are being imported at approximately 11% duty whereas finished products are imported at zero percent duties and taxes, which is detrimental for local assembly/manufacturing.

Representative of Paramount Lighting Company stated that the components included in SKD of LED light are cleared under the head of CBU as its single component. He said the same happens with the components of the CKD of LED Lights and these parts are imported by assembling units which only assemble these parts to the finished form. He added that if manufacturer imports the material for injection molding machine there is no duty relaxation in the PBT material as well. He highlighted the problem with the IOCO (FBR) and informed that FBR's staff being non-technical is unable to handle the technicalities involved. He further added that in order to encourage the local industry it is essential to include the raw materials for caps, bases, chips and drivers etc. at zero percent duty. They also proposed that the Old/Normal 100 volt bulb and energy saver are required to be banned.

CEO-EDB asked them to send detail proposal for tariff rationalization for the budget. General Manager (SDG), EDB informed that as per International Trade Center (ITC) data global market of LED lighting is $ 58.91 billion in year 2018 and is expected to reach $127.97 billion by 2024, with a Compound Average Growth Rate (CAGR) of 13.75% during the forecast period 2020 - 2025. He highlighted that Pakistani LED Lights manufacturing industry is quite capable for supply of every type of LED light in local as well as in international market and has also the capability to manufacture the parts of LED lights in the country. This industry has not only earned good response in the international market by exporting the LED Lights to Canada, US, UAE, United Kingdom and other countries but also have served well in the domestic market substituting maximum quantum of imports. As a result import of LED lights is drastically reduced. He further said that the qualities of locally produced LED lights are better than the imported ones.

Secretary, General, LED Lightings Manufacturing Association said that there is immediate need for establishment of reputable product testing new Labs which are considered very imperative to improve product quality and value addition, in addition to ensuring that non-standardized products don't enter the local market. Presently, local LED lights industry is exporting their products in international market after lab tests from overseas. He said that indigenous testing facilities at PCSIR etc are charging exorbitant fees from local industry.

Moreover, industry representatives emphasized that the units established under Special Economic Zones (SEZs) are being given incentives but other than those SEZs are not having any incentive which is creating disparity. He proposed that LED clusters may also be given such status.

The industry representatives also requested for support in participation in the international trade fairs/exhibitions. In this regard, GM (BDG) briefed the stakeholders about 3rd China International import (CIIE) Expo to be held November 5-10 Shanghai China and offered them for participation in this event. GM said that this event has become all more important in the wake of commencement of CPFTA-II in which a number of engineering related items have been given excess at zero percent by China. The stakeholders of LED lightings manufacturers showed their interest for participation in CIIE.

NEECA proposed that requisite labeling is to be made mandatory on all items of this industry to which the industry opposed as it adds to the cost.

The meeting was attended by Secretary General LED Lighting Manufacturers Association, Managing Director Micropak (Pvt.) Ltd; representatives of OSAKA, Paramount Lighting Company, Pak Lamps Ltd, DS Technology, Dai-Ichi Lighting, Dai-Shida Energy Saver Lamp, Saz Electronics Lighting Co, Areebah Technology, Pak Lamps Ltd, Orion Lighting, and Novapack; and officials from National Energy Efficiency & Conservation Authority (NEECA) and EDB.