KARACHI: The Pakistan Automotive Manufacturers Association (Pama) has urged the government to tread carefully on trade agreement with Sri Lanka as it indirectly provides market access to India which using joint ventures will dump its subsidised products in Pakistan.

In a letter to the Ministry of Industries, DG Pama, Abdul Waheed Khan, pointed out that in January 2008, the Sri Lankan FTA negotiators admitted that Sri Lanka does not have the potential to export different auto parts.

He recalled that during the meeting concerns of Pakistani auto sector were duly recorded and the following decisions were taken.

Sri Lanka agreed to allow Pakistan to place 49 direct tariff lines in its no Concession List. The remaining 38 tariff lines relating to auto sector would be discussed in the next meeting along with Sri Lanka’s request list tabled during the meeting.

Meanwhile, Sri Lanka will not issue certificates of origin for these products for export to Pakistan under the PSFTA.

However, it seems that the expected potential investment into Sri Lanka is now materialised and most likely source of this investment is India.

“This is a major concern for the auto industry and should be equally alarming for ministry of commerce.“

Our industry is already facing a hostile tariff regime where local vending industry is importing castings and forging at 20pc duty. With the finished products, like gears, being allowed to be imported at 5pc or less duty from Sri Lanka, the local industry will suffer badly.

Parts like ignition coils, CD units and parts and accessories for motorcycles, etc. are attracting basic customs duty at 35pc and an additional duty of 15pc.

Published in Dawn, October 3rd, 2014