With deletion programmes mandated to be abolished under the WTO to be effective from January next, the Engineering Development Board (EDB) is formulating a tariff-based system to give protection to the vending industry - in particular the vending industry for automobiles that is Papaam. The manufacturers of cars, trucks, buses, tractors, and motorcycles have practically expressed concerns in the manner Papaam is dictating the policy decisions at the Engineering Development Board, and seeking protection, which will defy the chances of providing level playing field, as Papaam wants all the controls to continue to be in its hands for at least three more years.

At the 79th indigenisation committee meeting held recently under the chairmanship of the Planning Commission deputy chairman, who is also the EDB chairman, components already deleted if imported will attract the CBU rate of duty or 50 percent duty or whichever is more.

In the case of some category of cars such duty would be 100 percent or even more thus making it impossible to import any deleted part. The biggest anomaly thus created while all the parts can be imported by businessmen engaged in importing spare-parts at 35 percent duty and manufacturers will pay such high duties.

New entrants will not be allowed to import parts which have been developed locally thus in a way all new-comers are being blocked to set up new industry, while the government is continuously seeking new investments. This is reported to have been done to block the entry of low-priced Chinese automobiles and motorcycles.

The policy also makes it mandatory to continue to indigenise parts over the period of three years for which targets have been set at 20 percent for 2004-05, 40 percent for 2005-06, and also 40 percent for 2005-07. Such high targets, industry sources say are not achievable.

The sources said that huge confusion has been created with a number of anomalies.

Copyright Business Recorder, 2004