Friday June 14, 2024

‘LC crisis to spur smuggling of automobile parts’

By Our Correspondent
February 03, 2023

KARACHI: Importers of automobile parts on Thursday warned that non-issuance of letters of credit (LCs) was paving way for smuggling of the spare parts through illegal channels, causing losses to legitimate traders as well as the national exchequer.

“Although consignments remain stuck up at the ports yet the spare parts of all types of vehicles are easily available all over Pakistan as these are being smuggled into the country through illegal channels without any check”, said Sheikh Haroon Baksh, Pakistan Automobile Spare Parts Importers and Dealers Association (PASPIDA) chief, who was leading a delegation on a visit to Karachi Chamber of Commerce and Industry (KCCI).

Baksh also stressed to bringing down exorbitant duties on imported spare parts, adding Custom authorities were imposing duties as per weight of imported consignment regardless of considering the actual worth of consignment.

“It is totally illogical as several spare parts, though heavier, are not so expensive but these go beyond the reach of buyers after imposition of exorbitant duties calculated as per weight.”

The situation was encouraging smuggling, which was neither in favor of businesses nor the already ailing economy, he added while requesting KCCI to take up the issues with relevant authorities.

Speaking on the occasion, PASPIDA patron in chief Arshad Islam appreciated the Karachi Chamber for the efforts being made to get the LCs and stuck-up containers’ issues resolved by devotedly taking up not only with the authorities at federal level but also with all the shipping lines and terminal operators.

“While anxiously waiting for relief, the traders of spare parts are fairly optimistic that this issue will soon be amicably resolved thanks to all the hard work being done by KCCI in an extremely challenging environment,” he said.

KCCI president Tariq Yousuf advised PASPIDA members to look into a possibility of setting up industries in Pakistan for locally manufacturing automobile spare parts as under the prevailing circumstances, it was no more feasible to keep relying on imported spare parts, he added.

“In order to reduce the current account deficit, it has become inevitable to go for import substitution. We have to realize that Pakistan’s economic prosperity depends on greater exports and lower imports which can only be attained through industrialization,” Yousuf said.

He also urged the delegation to set up spare parts manufacturing units, saying the Karachi chamber would be available to assist them in case they face any problem in dealing with relevant departments.

PASPIDA delegation members, while agreeing to KCCI president’s suggestion, stated that although they wanted to set up industries for locally manufacturing spare parts but were unable to do so due to several issues, including high cost of doing business, poor infrastructure, electricity, gas and water crises along with unavailability of required raw material for manufacturing.