Pakistan may start importing tractors from India after normalisation of trade with the neighbouring country, an official of a leading Indian engineering conglomerate said on Friday. According to him, a local tractor firm, which already has trade links with an Indian counterpart, is likely to import parts of tractor if the item is included in the ‘positive list’ this month.
Meanwhile, representatives of both companies claimed that they had an arrangement akin to a joint venture since 2003, but direct trade was avoided because of restrictions on import from India. Representatives of the two companies were at the Federation House to attend the meeting between members of Confederation of Indian Industry (CII) and FPCCI.
Talking to Business Recorder, Rajive Kumar, Head of Exports, Escorts Limited said that being India’s leading engineering conglomerates operating in the high growth sector of agri-machinery, the group was looking for a distribution network for its tractors and farm machinery.
Indian tractors are very similar to the ones being manufactured in Pakistan which is facing a shortage of important agricultural machinery. “If the import/export barriers are removed not only shortages could be met and tractors assembled/ redesigned here could be re-exported to other neighbouring countries such as Afghanistan, Iran and others,” he said.
“We are initially in talks with Pakistani company as distributors, however capital investment may also be made in the local company later,” he said. Mohammad Iqbal, Managing Director of Universal Tractor Pakistan, said that there was a domestic demand of 90,000 tractors while the local production capacity was only 60,000 tractors. “We are ready to import CKDs and tractor parts from India if the item is deleted from the negative list,” he said adding that opening up of trade links would benefit the tractor industry of both countries.
“In the absence of direct trade links, we have imported at least 100 tractors from Indian subsidiary companies in Poland and the United States during the past 10 years,” Iqbal said, adding that a Joint Venture Technical Collaboration Plant was built which would help the company to produce increased number of local tractors.
According to him, although Pakistan had comparatively cheaper tractors, assembling Indian tractors based on older technologies would be cheaper, resulting in huge savings in freight charges, customs duty and cost of labour. “We are hopeful that the ministry of commerce and other authorities concerned will include tractor in the positive list of trade with India keeping in view the importance of the agricultural machinery and possibilities of growth in this industry,” he said.