KARACHI: A leading Japanese car assembler, having over 50 per cent market share, has sought deletion of six Harmonised System (HS) Codes covering CKD parts imports only from the India Trade Negative List.

The move comes at a time when India and Pakistan are aiming to foster bilateral trade. In a letter sent to Prime Minister Mian Nawaz Sharif on January 31, 2014, Pak Suzuki Motor Company Limited (PSMCL) claimed that “its vendors have also given full support to the company on this proposal.”

Only those parts will be imported from India which are not produced locally and are currently being imported from Japan and other countries, the PSMCL said.

The company does not desire any change in the duty structure for import of CKD parts from India. The Japanese assembler and its vendors only want removal of six HS Codes including 8703.2111 (components for the assembly of 800cc), 8703.2191 (components for assembly of 1,000cc), 8703.2210 (components for assembly of 1,300cc cars), 8703.2311 (components for assembly of 1,500cc cars), 8703.2194 (components for assembly of mini van) and 8704.3110 (components for assembly of pick ups) from the negative list.

Specifically, import duties on CKD parts and A-Max parts under SROs 565 and 693 should remain same whether import is made from Japan, India or any other country.

Counting on benefits from this proposal, MD and CEO PSMCL Hirufumi Nagao in his letter to the prime minister said that change of source from Japan to India will save precious foreign exchange and eventually result in reduction in cost of vehicles and availability of more choice for consumers.

Importing parts from India will have two advantages – one is lower price of components due to lower raw material, utilities and labour costs and secondly reduction in cost of freight and transportation time due to import from land route of Wagah-Lahore and also from short sea route from Mumbai and Mundira to Port Qasim.

Pakistan can benefit from import of low priced components from India whose benefits would be passed to the consumers.

However, he said Pak Suzuki does not have any desire to import any localised parts from India.

The resultant reduction in CKD cost and introduction of new models will boost Pak Suzuki sales besides expanding business quantum of venders supplying locally made parts.

“After normalisation of trade with India, Pak Suzuki is planning to introduce new and latest versions of cars such as Swift sedan,” he said adding that this will give more choice to consumers besides increasing government’s revenue if sales volume rises.

Giving further details, head of Public Relations and official spokesperson, PSMCL, Shafiq Ahmed Shaikh said India has an advantage of availability of latest technologies. Due to same Japanese principal in both the countries, Pak Suzuki has the advantage in transfer of modern technology to Pakistani vendors from Indian vendors. Transfer of technology from Japan and other countries is difficult due to higher cost, unwillingness, small market, law and order situation etc.

Technology transfer from Indian vendors to Pakistani vendors will be most appropriate at lower cost due to geographical location of two countries.

“Due to the Suzuki umbrella, Indian auto vendors are ready for technology transfer to Pakistani vendors even some are ready for investments/joint ventures,” he said.

The company maintains that through this proposal, billions of investment will come besides opening new job avenues and enabling the company to export vehicles to rest of the world and if possible to India.