Auto parts makers urge consultations on draft policy

ISLAMABAD: The Pakistan Association of Automotive Parts & Accessories Manufacturers (Paapam) has raised concerns over reports that the draft Automobile & Auto Parts Manufacturing Policy for 2026-31 is being sent to the International Monetary Fund (IMF) without what it described as meaningful consultation with the Engineering Development Board (EDB), parts vendors and other major stakeholders in the industry.

In a statement, Paapam Chairman Usman Aslam Malik said the approach had created unease across Pakistan’s auto parts manufacturing sector. He said the industry supports more than one million livelihoods nationwide.

Malik said over 300,000 workers are directly employed in machining, tooling, moulding, forging, casting and assembly, while another 700,000 people rely on related activities including logistics, raw material supply, aftermarket distribution and engineering services. He warned that any damage to the sector would have direct implications for employment and industrial stability in the country.

Concerns over tariff policy

Paapam Senior Vice Chairman Shehryar Qadir said applying the National Tariff Policy to the auto sector in a uniform manner, without protective measures, could undo four decades of localisation. He said such a move could weaken the gains made by the domestic industry, affect billions of rupees invested by local vendors, reduce the size of the local vendor network and hurt industrial self-reliance.

Qadir said the automobile sector should not be treated as a trading business, describing it instead as a technology-intensive industry that requires a tailored policy framework.

According to the association’s leadership, the auto parts industry serves not only original equipment manufacturers (OEMs) but also supplies products for agriculture, motorcycles, commercial vehicles, appliances and defence engineering. They added that the sector also contributes foreign exchange through exports.

Industry demands

Paapam has asked the government to halt submission of the draft policy to the IMF and reopen engagement with industry stakeholders. The association also called for the protection of localised parts through tariff differentiation and urged the adoption of what it described as a balanced, export-oriented framework.

The statement reflects growing concern within the domestic auto parts industry over the direction of the proposed policy and its possible impact on local manufacturing, investment and employment.