Proposed tariff rationalisation plan discussed
He emphasised that while the intent behind tariff rationalisation may be to make cars more affordable for customers, the proposal currently under consideration—if implemented without a well-thought-out approach—could have an adverse impact on Pakistan's local auto industry, undermine investor confidence, and lead to a current account deficit.
He noted that under the Auto Development Policy (ADP) 2016–2021, Korean, European, and Chinese automakers entered the Pakistani automotive market with a cumulative investment of approximately $1.2 billion to establish local manufacturing plants. This initiative achieved key objectives, including offering more choices to consumers, fostering competition, and creating employment opportunities both in vehicle assembly and the auto parts manufacturing sector.
While expressing support for the government's initiative to rationalise tariffs, Tabba stressed that a significant gap must be maintained between CBU and Completely Knocked-Down (CKD) duty rates in order to protect the domestic auto industry. He suggested that a consultation session be held with key stakeholders to determine the appropriate duty differential between CBU and CKD imports in order to safeguard the local auto industry.
In addition to tariff concerns, he voiced his reservations about the potential liberalisation of used car imports. He stated that Pakistan's auto industry currently produces and sells around 150,000 units per year and hosts approximately 16 automobile brands — offering far more consumer choice than in the past. In this context, there is no justification for liberalising used car imports.
He also expressed concern over the government's proposal to allow the commercial import of used cars, warning that such a policy could turn Pakistan into a 'junkyard' of second-hand vehicles.
Given Pakistan's fiscal constraints and limited foreign exchange reserves, Tabba proposed that a liberal import and tariff regime is unsustainable and would likely result in the depletion of FX reserves, a widening current account deficit, and further depreciation of the PKR.
In response, the SAPM on Industries and Production assured Tabba that the government values industry input and will consult all stakeholders before finalising any decisions on the tariff rationalisation and used car import policies.
Copyright Business Recorder, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
23 minutes ago
- Business Recorder
Pakistan buys about 55,000 tons white sugar in tender, traders say
HAMBURG: Pakistan's state trading agency TCP is believed to have purchased about 55,000 metric tons of white sugar in an international tender seeking up to 100,000 tons which closed this week, European traders said on Wednesday. Some 30,000 tons of medium-grade sugar was said to have been purchased from Al Khaleej Sugar at $586.00 a ton cost and freight included (c&f) while 25,000 tons of fine grade was bought from Dreyfus at around $580 a ton c&f. One other tender participant has been asked to modify its offer and another award is still possible this week, traders said. Sugar tender: TCP receives 4 bids Pakistan's government has approved plans to import 500,000 tons of sugar to help to maintain price stability after retail sugar prices rose sharply. Offers in the tender were reported on Monday.
Business Recorder
2 hours ago
- Business Recorder
Wheat up 1-2 cents, corn up 1-2, soybeans up 10-12
CHICAGO: The following are U.S. expectations for the resumption of grain and soy complex trading on Wednesday: Wheat - Up 1 to 2 cents per bushel Wheat futures recovered after falling to contract lows on Tuesday, pressured by lower corn prices and large global supplies. The U.S. Department of Agriculture sharply raised its 2025 U.S. corn harvest outlook in a monthly report on Tuesday, sending prices of the grain tumbling. The pressure spilled into wheat, in part because it makes wheat less attractive as a livestock feed, analysts said. A group of South Korean flour mills bought an estimated 50,000 metric tons of milling wheat to be sourced from the United States in an international tender on Wednesday, European traders said. CBOT September soft red winter wheat was last up 1-1/4 cents at $5.06-1/4 per bushel. K.C. September hard red winter wheat was last down 1/2 cent at $5.10-1/4 per bushel. Minneapolis September wheat was last up 1 cent at $5.78-1/4 a bushel. Corn - Up 1 to 2 cents per bushel Chicago corn edged higher on Wednesday, steadying after a more than 3% drop in the previous session when the U.S. Department of Agriculture shocked the market with its projection of a record U.S. crop well above trade expectations. The USDA projected corn yields will average 188.8 bushels per acre, up from its previous forecast of 181 bushels per acre, and that farmers will harvest 16.742 billion bushels, up from its previous estimate of 15.705 billion bushels. Leading South Korean feedmaker Nonghyup Feed Inc. (NOFI) purchased around 68,000 metric tons of animal feed corn in a private deal on Wednesday without an international tender being issued, European traders said. CBOT December corn was last down 1-3/4 cents to $3.96-1/4 per bushel. Soybeans - Up 10 to 12 cents per bushel Soybean futures rose after the USDA's data on the soybean crop came in below expectations. The agency lowered its production estimate to 4.292 billion bushels from 4.335 billion in July. It said farmers planted 80.9 million acres of soybeans this spring, compared to its July estimate of 83.4 million acres. The USDA estimated 2025-26 soybean ending stocks will drop to 290 million bushels, compared to its July projection for 310 million. Analysts had expected an increase to 351 million. CBOT November soybeans were last up 11-1/2 cents at $10.44-1/4 per bushel.
Business Recorder
8 hours ago
- Business Recorder
European shares rise on Fed rate cut hopes
European shares advanced on Wednesday, with technology and defence stocks leading gains, as global mood remained buoyant after tame US inflation data cemented expectations of interest rate cuts by the Federal Reserve. The pan-European STOXX 600 index rose 0.4%, as of 0704 GMT, with Germany's blue-chip DAX up 0.6% after dipping in the previous session. Global stocks rallied and Wall Street closed at record highs as traders priced in a 94% chance of a Fed rate cut in September, according to the CME FedWatch tool. Meanwhile, leaders from Europe and Ukraine are set to speak to US President Donald Trump later in the day ahead of his summit with Russian President Vladimir Putin. TUI rose 1.7% after Europe's largest tour operator posted better-than-expected results as summer travel proved to be resilient. reported a bigger first-half core profit and maintained its full-year outlook with Europe's largest energy grids operator calling on Germany to raise future returns on grid investments. Shares were marginally up. Vestas fell 1.8% after the wind turbine maker reported a smaller-than-expected rise in operating profit for the second quarter but maintained its fiscal-year financial outlook. Reuters
