PAAPAM raises red flags over tariff policy after talks with government bodies

LAHORE: After a series of meetings with the Ministry of Industries and Production (MOIP) and the Engineering Development Board (EDB), the Pakistan Association of Auto Parts Manufacturers (PAAPAM) has raised alarm over the government’s proposed National Tariff Policy 2025-30, warning of dire consequences for domestic industry and employment.

During these meetings, PAAPAM leadership conveyed their deep reservations about the policy’s direction -- particularly the adoption of tariff rationalisation measures recommended by IMF consultants. They criticised the lack of consultation with industry stakeholders and warned that such unilateral decisions would severely undermine the auto parts manufacturing sector, which is vital to Pakistan’s local OEM supply chain, including car, tractor, motorcycle, truck, bus, and defence/railway equipment production.

To escalate their concerns, PAAPAM convened an extraordinary general meeting where members voiced fears that the policy could trigger widespread factory closures and massive job losses. They argued that reducing tariffs would steer the economy further towards imports, weaken local industrialisation efforts and place additional pressure on Pakistan’s already limited foreign exchange reserves.

The association underscored that the auto parts industry plays a central role in developing skilled human resources, many of whom go on to secure employment overseas, contributing significantly to national remittances. Disruption in this sector would stall Pakistan’s engineering workforce pipeline and limit opportunities for skilled labour in global markets. “We urge the government to adopt a structured and long-term approach to tariff changes, rather than abrupt adjustments that destabilise the industry,” said PAAPAM Chairperson Usman Aslam Malik. “The livelihoods of thousands of skilled workers, and the sustainability of Pakistan’s industrial base, are at stake.”

Senior Vice Chairperson Shehryar Qadir added: “Our industry has worked hard to enhance quality and efficiency over the years.

A sudden tariff reduction would unravel decades of progress and unfairly expose local manufacturers to foreign competition. We need policy that supports growth -- not undermines it.”

Reaffirming its commitment to dialogue, PAAPAM called for the formation of a balanced and sustainable tariff structure in consultation with industry stakeholders. The association stressed that a collaborative approach is essential to protect jobs, strengthen domestic manufacturing and ensure long-term economic resilience.