KARACHI, May 20: The local television industry is up in arms against a possible government move to include television import at zero rate duty in the Afghan Transit Trade (ATT) agreement, fearing over Rs3 billion investment wipe-off and unemployment of over 4,000 employees.

Pakistan and Afghanistan are engaged in fresh negotiations to hammer out a new transit trade agreement under which a majority of the items delisted earlier are to be included back. Commerce Minister Abdul Razak Dawood is due to visit Kabul later this month to give a final shape to the agreement.

“The local industry will collapse, if these two negative developments take place,” Chairman, Pakistan Electronics Manufacturers Association (PEMA), Sarfarazuddin, informed commerce minister Razak Dawood few days back.

Domestic TV assemblers — 10 in all — fear a fresh wave of television sets smuggling into Pakistan from Afghanistan if the new ATT includes television sets import at zero rate.

Even now when ATT is suspended about 150,000 to 200,000 TV sets are brought in Pakistan through unauthorized channels, posing an economic threat to the local assemblers, he said.

“If Afghanistan really needs TV sets Pakistan can provide them,” he said.

The PEMA chief said the association’s campaign against smuggling in the last few years proved helpful and a popular Japanese brand maker had started its local manufacturing operation in Pakistan after acquiring on lease a manufacturing unit, which was closed because of rising smuggling.

But the said brand had recently closed its assembling operations and switched over to imports at highly under-invoiced value through its agent in Pakistan. The above arrangement made by the foreign company is sabotaging the existing rules with the connivance of customs authorities and posing threats to the local industry.

He urged the Ministry of Commerce to check the under-invoicing and provide level-playing field to the industry.

He said Pakistan’s TV industry had come out of the woods in the last two to three years. According to figures provided by the PEMA chief, a total of 413,699 sets were produced during July 1, 2001 to May 15, 2002, providing a revenue of Rs716 million to the national exchequer as compared to 372,192 units (Rs672 million revenue) during July-June 2000-2001.

By end of fiscal 2001-2002, production by 10 main producers will reach to 450,000 units with revenue of Rs778 million in spite of highly adverse economic scenario. During July-June 1999-2000, a total of 288,834 sets were assembled, providing a revenue of Rs490 million. TV production stood at 72,000 (Rs290 million revenue) during 1997-98.

On other issues, the PEMA chief said Pakistan was also rationalizing tariff in accordance with the WTO agreement. The highest slab of duty last year was brought to 30 per cent from 35 per cent. In the upcoming budget, another five per cent duty is likely to be slashed to 25pc from 30pc.

In a letter addressed to the commerce minister on May 16, the PEMA said the industry might lose competitiveness if the import duty is brought down by 5 per cent.

The PEMA also called for cut in import duty on picture tube with deflection yoke, front cover and back cover, tuners and transformers and integrated circuits to zero per cent from 5 per cent in the upcoming budget.

The industry has been enjoying a boom in sales since Pakistani customers had suddenly developed a craze for foreign channels after the commencement of cable fever in every area. The sudden buying euphoria had also led to a stiff competition among assemblers, who had to also cut prices to gain market share. Entry of Korean assemblers like Samsung and LG TV sets with additional features, lucrative prize schemes and affordable prices had changed the outlook of the markets, giving a tough time to the already established players like Sony and Panasonic.