Pakistan Automotive Manufacturers Association (PAMA) has urged the Pakistani Government to tread carefully on trade agreement with Sri Lanka as it indirectly provides market access to India. PAMA has warned that India will dump its subsidised products in Pakistan using joint ventures.

In a letter written to the Ministry, Director General PAMA Waheed Khan has pointed out that in January 2008 Lankan FTA negotiators admitted that Sri Lanka does not have the potential to export different auto parts, Pakistani media stated.

He has also stressed that during 2008 meeting the concerns of Pakistani auto sector were duly recorded in the minutes. 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 MoC. A mistake that was committed at the time of first negotiation of PSFTA with Sri Lanka should not be allowed to undermine now a thriving Pakistan’s vending Industry,” Waheed Khan has said in the letter.

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

“Parts like Ignition Coils (HS Code 851130), CD’ Units (Old HS Code 853230 Revised HS Code 851180) and parts and accessories for motorcycles including mopeds (Old HS Code 871419, revised HS Code 871410, this HS Code includes 49 localised parts) etc. are attracting basic Customs duty at 35 percent and an additional duty of 15 percent.

These parts being imported from Sri Lanka will again be coming at 5 percent duty or less. We will be giving away our market to Indian products routed through Sri Lanka at the cost and peril of a domestic value adding industry,” the letter has quoted.