The government of Pakistan has recently increased the regulatory duty on steel imports, auto parts and engineering products from 15 percent to 35 percent by issuing the SRO 1035 in October 2017. This is a direct threat to national revenue as it has increased the input cost of these value-added sectors. The auto parts industry will suffer if the regulatory duties on its products aren’t withheld.
The auto industry is governed by the Automotive Development Policy (ADP) 2016-21. Under this policy, all automotive parts manufacturers are registered with the Engineering Development Board (EDB), which governs and monitors their raw materials to safeguard against the misuse of concessionary duties. Levying a regulatory duty contravenes the policy framework laid down in the ADP and renders the auto parts industry uncompetitive as against imported auto parts. The government should assist the manufacturers of auto parts in Pakistan by either reducing or simply doing away with the duty on the import of raw materials.
Muhammad Rohail Hassan