KARACHI: Members of a delegation of the Pakistan Automobile Spare Parts Importers and Dealers Association (PASPIDA), while expressing deep concerns over the containers stranded at ports and non-issuance of LCs, have stated that the situation has triggered a severe crisis for the automobile sector as it has served to discourage imports through legal channels and paved the way for massive smuggling of spare parts, including through blatant misuse of the Afghan Transit Trade, causing severe losses not only to the legitimate traders but also to the national exchequer.

“Although consignments remain stuck at the ports, yet the spare parts of all types of vehicles are easily available all over Pakistan, as these are being smuggled into the country through illegal channels without any check,” said Sheikh Haroon Baksh, the leader of the PASPIDA delegation, during a visit to the Karachi Chamber of Commerce and Industry (KCCI).

KCCI President Mohammed Tariq Yousuf, Senior Vice President Touseef Ahmed, former president Muhammad Idrees, Patron-in-Chief of PASPIDA Arshad Islam, former vice president Qazi Zahid Hussain, members of the visiting delegation, and KCCI managing committee members attended the meeting.

Haroon Baksh, while stressing the need to bring down the exorbitant duties on imported spare parts, said that nowadays the Customs authorities are imposing duties as per weight of imported consignment regardless of their actual worth, which was illogical as several spare parts, though heavier, were not so expensive but these go beyond the reach of buyers after imposition of exorbitant duties calculated as per their weight.

“In this situation, smuggling is thriving which is neither in the favour of businesses nor the already ailing economy,” he said while requesting the KCCI to take up the issues with the relevant authorities.

Speaking on the occasion, Arshad Islam praised the Karachi chamber for its efforts for getting the issues of LCs and stuck-up containers resolved by devotedly taking them up not only with the authorities at the federal level but also with all the shipping lines and terminal operators. “While anxiously waiting for relief, the traders of spare parts are fairly optimistic that this issue will soon be amicably resolved thanks to all the hard work being done by the KCCI in an extremely challenging environment,” he added.

In his remarks, Tariq Yousuf said that as a facilitator it was the Karachi chamber’s topmost priority to get the issues resolved promptly so that businesses as well as industries stay operational.

Keeping in view the economic crises being faced by the country, he advised the PASPIDA members to look into the possibility of setting up industries in Pakistan for manufacturing automobile spare parts because under the prevailing circumstances it was no longer feasible to keep relying on imported parts.

“In order to reduce the Current Account deficit, it has become necessary to go for import substitution. We have to realise that Pakistan’s economic prosperity depends on greater exports and lower imports which can only be attained through industrialisation,” he said.

He urged the PASPIDA members to set up spare parts manufacturing units in Pakistan and said the Karachi chamber will always be available to assist them in case they face any problem in dealing with relevant departments.

While agreeing with the KCCI president’s suggestion, the PASPIDA representatives stated that although they wanted to set up industries for locally manufacturing the spare parts but they were unable to do so due to several problems, including high cost of doing business, poor infrastructure, electricity, gas and water crises along with unavailability of the required raw material. Inconsistent policies, bureaucratic hurdles and taxation issues further discourage businessmen to get into this business whereas Pakistan’s engineering sector was also not mature enough to produce several high-quality spare parts.

If the government provides an enabling environment and a level playing field by bringing down the cost of doing business through reduction in taxes and tariffs in addition to announcing some kind of special incentives for the automobile sector, many PASPIDA members would certainly set up units for local production of parts, they added.

Copyright Business Recorder, 2023