ISLAMABAD, May 24: Ministries of commerce and textile have proposed to the budget-makers to include locally manufactured machinery in the zero-rated duty scheme for the export-oriented industries in the next budget.

Informed sources told Dawn on Wednesday the ministries had asked the budget-makers that restrictions and high tariffs on import of locally manufactured machinery discouraged expansion in the export-oriented industries.

The Central Board of Revenue (CBR) had last year slashed duty to five per cent across-the-board on import of all machinery which were not manufactured locally. However, the duty on locally manufactured machinery ranged from 10 to 25 per cent.

According to the sources, the Engineering Development Board (EDB) was opposing the proposals to exempt or reduce customs duty on the locally manufactured machinery.

The industry ministry, the sources said, was of the opinion that a certain level protection should be given to local industries even if it did not produce goods of international standards.

The sources said that textile ministry had also proposed for blanket exemption on import of both local and non-local machinery which was necessary for increasing the quality and production of the textile commodities.

“We are using obsolete machinery in certain textile sector while our competitors — India, China, Bangladesh — are using the modern sophisticated machinery for their production,”, added the sources.

On the other hand, the sources said that commerce ministry had proposed to the government to withdraw the conditions and reduce customs duty in the range of five to zero per cent on import of locally manufactured machinery for the export-oriented industries.

The sources said that the ministry was of the opinion those machinery, which were not manufactured locally should be exempted from the whole of customs duty.

“There will be no fruitful result from the zero rate of duty concept introduced last year, if it is linked with a condition that it would not apply to those machinery manufactured locally,”, the sources added.

According to the sources, the commerce ministry had also proposed five new sectors — knitwear, footwear, marble, horticulture and parboil rice — for consideration under the zero-rated scheme (reduction of customs duty) announced last year.

The sources said that the inclusion of these sectors in the scheme would help to a great extent in expansion of the industries besides resolution of refund issues of these industries.