• Saturday, December 7, 2019

Pakistani Auto industry mulls trade with India

Discussion in 'Central & South Asia' started by Brahmos_2, May 5, 2014.

  1. Brahmos_2

    Brahmos_2 FULL MEMBER

    Messages:
    1,413
    Joined:
    Feb 19, 2013
    Ratings:
    +1 / 3,094 / -1
    Country:
    India
    Location:
    India
    KARACHI: Though the automobile industry has been a protected sector in Pakistan, it debates the abolition of the negative list and the tiny sensitive list in trade with India.

    In an interview with The Express Tribune, House of Habib Vice Chairman Automotive Sohail P Ahmed explained why the auto industry is not against trade with India and how it wants the government to ease restrictions steadily.

    Ahmed said that it is possible for the automobile industry to grow at home while gradually moving ahead in trade with India step by step. “Auto industry requests the government to chalk out a long-term plan that can increase manufacturing of automobiles and their parts in the country,” he added.

    According to a recent report by the Pakistan Business Council (PBC) – a business policy advocacy forum – Pakistan’s automotive industry is protected under the negative and sensitive lists with many items overlapping in the two lists. Moreover, the automobile sector would most likely enjoy protection even after the abolition of the negative list (a list of 1209 items in which Pakistan does not allow trade with India).

    There is a list of 122 items (HS codes) related to the auto industry. The same PBC study identifies 25 such items that holds a potential of $1 billion imports (Pakistan already imports such items from different countries) and out of these, 23 are protected by Pakistan under the negative and sensitive lists fearing tough competition with India. The report explains that India is a cheaper alternative for such parts, if not complete units, instead of the country’s current source of import such as Thailand and Japan.

    The government of Pakistan is looking to give Non Discriminatory Market Access (NDMA) that will technically abolish the negative list. In return, it desires India to remove all non-tariff barriers (NTBs) that it feels are hampering Pakistani exports. However, since the South Asian Free Trade Agreement (SAFTA) allows its signatories to maintain the sensitive list, both India (614 items – reduced by 30% in 2011) and Pakistan (936 items – reduced by 19% in 2011) will continue to maintain their sensitive lists.

    Later in September 2012, both countries promised to give further concessions: India agreed to cut its sensitive list to just 100 items and Pakistan to give it NDMA status and open the Wagah-Attari border for all items.

    Unlike Pakistan, India does not maintain any negative list for Pakistan. But since it has strong and complex tariff and para-tariff protections for its local industry, a large number of Pakistani exporters find it difficult to export to India.

    Ahmed’s unease seems more with-shortening of the sensitive list than granting NDMA status to India. “Pakistan can bring down the sensitive list to 350-400 items from the current 936 items but not to 100 items as it will badly hurt its auto industry,” he said.

    Replying to a question on the protection of the local auto industry, he said that like most countries, the auto industry may be protected more in Pakistan compared to other industries but it is surely less protected (citing high imports of used cars in Pakistan) than its competitors.

    “But one thing is clear, if you want to promote manufacturing in the country then you must protect your local industry.” said Ahmed. Citing examples of India, Malaysia and Thailand, he said automobile producing countries protect their auto industries because this industry creates larger number of jobs especially in auto part manufacturing.

    While agreeing with auto analysts, Ahmed said that compared to automakers, auto parts makers are more likely to get a hit if Pakistan starts importing auto part from India.

    Since volumes of Pakistan’s auto parts makers are extremely low compared to their Indian counterparts, their cost of production is significantly higher which is why many of them may shutdown in case of an open trade with India, he maintained.

    With all the reservations, Ahmed is convinced that joint ventures and technology transfers from Indian automakers is the best business model that can work for both Indian and Pakistani automakers. “I am in all favour of joint ventures and technology transfer with Indian auto companies. If that happens, it will converge the interests of Indian and Pakistani auto industries bringing down cost of production and also create more job opportunities,” he said.

    Auto industry mulls trade with India – The Express Tribune
     
  2. Pakistanisage

    Pakistanisage PROFESSIONAL

    Messages:
    9,448
    Joined:
    Jul 29, 2011
    Ratings:
    +19 / 15,744 / -1
    Country:
    Pakistan
    Location:
    Pakistan
    If Joint Ventures and Technology Transfer is the goal, why do it with India. Check out other more advanced Manufacturers from Germany, Japan, South Korea, France, Italy , Sweden and others. We have a market of 200 million domestically and we sit next door to Middle East Market.

    We should be thinking of Exporting to India as their domestic Auto Market is pretty Pathetic.
     
  3. Piru Niqqa

    Piru Niqqa BANNED

    New Recruit

    Messages:
    84
    Joined:
    May 5, 2014
    Ratings:
    +0 / 72 / -6
    Country:
    India
    Location:
    India
    Pakistan is light years ahead of India ajlaf?
     
  4. Pandora

    Pandora SENIOR MEMBER

    Messages:
    4,747
    Joined:
    Feb 15, 2013
    Ratings:
    +6 / 6,007 / -1
    Country:
    Pakistan
    Location:
    Australia
    Pakistan has a very robust auto industry. But being an Indian justifies your comments.
     
  5. sree45

    sree45 FULL MEMBER

    Messages:
    1,731
    Joined:
    Feb 28, 2013
    Ratings:
    +2 / 2,556 / -1
    Country:
    India
    Location:
    India
    Robust? Pakistan auto sector would take atleast a decade to reach India's current standards.
     
  6. airmarshal

    airmarshal SENIOR MEMBER

    Messages:
    7,821
    Joined:
    Jul 28, 2010
    Ratings:
    +9 / 9,577 / -0
    Country:
    Pakistan
    Location:
    Canada
    Indian members dont recognize that their govt MFN status counts for nothing as they have non tariff barriers. This is concealing facts for political reasons.

    India plays politics with MFN status.

    As for joint ventures and technology transfer. China is a better alternative. China auto industry is much bigger than India. Or if Pakistan really wants to learn, why not technology transfer agreements with more advanced countries in automotive sector like Germany or Korea?

    The argument another flaw is that Pakistan is a smaller market. Its not. The market looks smaller as the way auto industry is being run in Pakistan is a totally monopoly of three assemblers. They operate like a cartel. As prices are higher, the market looks smaller as fewer can afford expensive cars.

    Despite incentives, these auto assemblers have not completed the deletion program they promised with the governments. Not only that, they hamper new players from entering the market. This has a cyclic effect in that the control remains with these 3 and they have no incentive to introduce new models, encourage local manufacturing or bring prices down.

    Not decade but at least 5 centuries. Happy!!?

    You Indians live in a bubble which I dont know exists in which universe.
     
  7. Pandora

    Pandora SENIOR MEMBER

    Messages:
    4,747
    Joined:
    Feb 15, 2013
    Ratings:
    +6 / 6,007 / -1
    Country:
    Pakistan
    Location:
    Australia
    No point arguing with someone who already made up his opinion. Secondly i never compared our auto sector with india so get over with your size complex.
     
  8. Robinhood Pandey

    Robinhood Pandey SENIOR MEMBER

    Messages:
    5,581
    Joined:
    Sep 22, 2013
    Ratings:
    +7 / 23,619 / -7
    Country:
    India
    Location:
    India
    [​IMG]
    Mahindra XUV 500
    [​IMG]
    Mahindra Scorpio

    [​IMG]

    mahindra xylo

    [​IMG]
    Mahindra komodo

    [​IMG]

    Tata safari
    [​IMG]
    Tata bolt
    [​IMG]
    Tata zest
    [​IMG]
    Tata Aria
    [​IMG]
    Tata Nano
    [​IMG]

    Tata Pixel
     
  9. janon

    janon ELITE MEMBER

    Messages:
    9,895
    Joined:
    Mar 19, 2011
    Ratings:
    +10 / 18,146 / -8
    Country:
    India
    Location:
    India
    1) Joint ventures and tech transfer are NOT the concern for Pakisan - importing basic components is. And as the article states, it is much cheaper to get these components from India than from Korea or Japan.

    2) Sure, and you should also export crude oil to Saudi Arabia and natural gas to Iran.

    And to compete with all those, Pakistan has their famous Habib Sitara cart car:

    [​IMG]

    Sitara, Pak's car, which 'beat India' - The Times of India
     
  10. Robinhood Pandey

    Robinhood Pandey SENIOR MEMBER

    Messages:
    5,581
    Joined:
    Sep 22, 2013
    Ratings:
    +7 / 23,619 / -7
    Country:
    India
    Location:
    India
    [​IMG]
    DC Avanti
    [​IMG]
    Tata Sumo

    [​IMG]
    Bajaj Avenger

    [​IMG]
    Bajaj Pulsar ss 400

    [​IMG]
    Bajaj pulsar Cs 400
    [​IMG]
    Pulsar 220
    [​IMG]

    Karizma 350
    [​IMG]
    TVS draken
    [​IMG]
    [​IMG]
    Hastur
     
    Last edited: May 5, 2014
  11. jaunty

    jaunty SENIOR MEMBER

    Messages:
    6,567
    Joined:
    Aug 1, 2009
    Ratings:
    +6 / 11,620 / -15
    Country:
    India
    Location:
    United States
    Not surprising that, this incredible lack of knowledge has been displayed by the braggart professional troll, how is your HSR coming along? LOL
     
  12. jaunty

    jaunty SENIOR MEMBER

    Messages:
    6,567
    Joined:
    Aug 1, 2009
    Ratings:
    +6 / 11,620 / -15
    Country:
    India
    Location:
    United States
    Maybe you should check the stupid post he was replying to.
     
  13. Pandora

    Pandora SENIOR MEMBER

    Messages:
    4,747
    Joined:
    Feb 15, 2013
    Ratings:
    +6 / 6,007 / -1
    Country:
    Pakistan
    Location:
    Australia
    One should ignore stupidity rather than getting sucked into it but anyways i get ur point.
     
  14. jaunty

    jaunty SENIOR MEMBER

    Messages:
    6,567
    Joined:
    Aug 1, 2009
    Ratings:
    +6 / 11,620 / -15
    Country:
    India
    Location:
    United States
    I agree with you. Ideally that's how it should be, but we don't live in an ideal world, both online and offline.
     
  15. sherin616

    sherin616 FULL MEMBER

    Messages:
    561
    Joined:
    Feb 6, 2014
    Ratings:
    +0 / 327 / -4
    Country:
    India
    Location:
    India
    indian vehicle is better for pakistan better than korean,japan,china....etc
    Reasons
    1)low rate vehicles
    2)japanees companies has been in pakistan for a long time and pakistan learned nothing
    3)indian vehicle suitable for pakistan roads