Tag Archives: Board of Investment (BOI)

Free trade with China may Dampen Investment in SEZs?

on 01/06/2018

Pakistani Manufacturers start selling Chinese-made products with ‘Made in Pakistan’ tags!

Beijing’s push for further trade liberalization under second phase of the Pakistan-China free trade agreement (FTA) may severely dampen prospects of Chinese investment in prioritized special economic zones (SEZs) being set up under  (CPEC).

It would be convenient and cheaper for Chinese companies to manufacture in China and import products into Pakistan at zero duties, which would render the SEZs useless, officials in the Board of Investment (BOI) fear.This will also dash Pakistan’s hopes of starting a new wave of industrialization as almost 60% of the national output is contributed by the services sector which is not job-oriented. This means Pakistan is en route to becoming a trading nation.

Another worrisome aspect of the proposed second phase of the FTA, called FTA-II, is that it is shrouded in secrecy. Both Federal Board of Revenue (FBR) and the BOI were not aware of the tariff lines on which the commerce ministry wanted to slash duties to zero.

The timing of the FTA-II is also a matter of concern for some government agencies as Pakistan is not yet ready for further open trade due to a lack of product diversification and high cost of doing business.The Commerce Ministry says it will not sign the FTA unless every stakeholder is on board including the BOI and FBR.

Prime Minister Shahid Khaqan Abbasi will visit Beijing next month and the government intends to sign the expanded FTA with China. Pakistan has reportedly agreed to offer zero duties on 75% of tariff lines, which constitute roughly 5,340 out of total 7,120 tariff lines. About 35% of tariff lines were already subjected to zero duties, which have caused huge losses to the domestic industries.

It was unearthed in a meeting of the Senate Standing Committee on Finance that Pakistani manufacturers have even started importing goods from China and selling them as ‘Made in Pakistan’ products by placing their stamps on them.The FBR is concerned that the proposed 75% reduction in customs duty will adversely hit its revenues. However, the government said it did not care about the revenue loss because the FTA-II would help increase Pakistan’s exports to China from the current $1.5 billion to $9 billion. – ER Monitoring Desk

Stakeholders calls for revoking decision

on 08/08/2017

EDB is a must for engineering industry, believes FPCCI

In a series of concern in the country, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has expressed concern over abolishing Engineering Development Board (EDB), calling for its continuity with more effective and transparent role for promoting engineering industry, especially auto industry in Pakistan. At FPCCI communication said Zubair F. Tufail, the president called a meeting of the stakeholders including automobile, automotive and auto spare parts associations at the Federation House to discuss the issue of abolishing EDB.  The meeting noted that the EDB was playing a fundamental role in promotion of engineering sector, protection of domestic industry and strengthening it by giving incentives. The closure and shifting responsibility of the EDB would disrupt large-scale manufacturing; especially the auto industry and would further complicate the situation including creation of impediments in investments in auto sector especially the vending sector, they said.  The EDB was an affiliated department of the Federal Ministry of Industries. It was established in 1995 with an aim to strengthen engineering sector, promote exports, increase technical training and enable import substitution. The board had presented two auto policies — in 2007 and 2016- which enhanced the number of auto assemblers from 3 to 55. The stakeholders urged proper implementation of auto policy, which would develop competition and bring opportunity of technology transfer. They also stressed on transparency, efficiency, expertise and merit in the EDB to fulfil objectives of strengthening engineering sector in the country and integrate it with the world market to make it the driving force for economic growth as the future of Pakistan depends upon the industries particularly on engineering, chemical and information technology industries which has a huge potential for contributing to economic growth and employment generation. Mr. Tufail assured that they would try to convince the government to continue with the EDB with complete restructuring of its Board of Directors by including representatives from private sector, Board of Investment (BOI) and the Pakistan Engineering Council (PEC).