Unlike a lot of industries, the local tractor industry is not war of opening of trade with India. In fact, it is looking forward to it. Universal Traders are in talks with an Indian counterpart to start importing tractors to Pakistan once the negative list is phased out and trade with India opens up next year.
Escorts Limited and Universal Tractors of Pakistan will collaborate next year to import 7,500 tractors. It is interesting that the two companies have been working together since 2003. However because of the ban on imports from India, these tractors were being imported from sister concerns of the Indian company from Norway and the US, at much higher cost.
The two companies are now hopeful that with the removal of the negative list tractors will be legally imported from India which will also help in combating smuggling.
The tractors will not be imported as a CKD and assembled in Pakistan. The assembly plant was commissioned under the tenure of former prime minister Shaukat Aziz and is already at an advanced stage of completion. Rajiv Kumar, Head of Exports at Escorts Limited spoke to The Express Tribune said that his company is already exporting to over 60 countries. Kumar also said that the company was initially set up in partnership with Ford in the 1960s. Ford left India in 1996 and since then the company is a full-fledged Indian enterprise. The company started off with an annual production of 20,000 tractors which has now gone up to 80,000. Basically this means that an Escorts tractor is manufactured every four minutes. The total Indian market for tractors is 650,000 a year.
Kumar also said that where Indian tractors would prove beneficial in overcoming the shortfall in the demand for tractors in Pakistan, there was no reason why Pakistani tractors could not make a foothold in the vast Indian market. He also spoke about the possibility of assembling in Pakistan for further onward exports.
Managing Director of Universal Tractors Pakistan, Muhammad Iqbal told The Express Tribune that they had imported 100 Indian tractors since 2003 through their European and American enterprises. He further said that once the negative list was phased out they planned on importing 28,500 tractors over the next three years. Iqbal also said that with the shortfall in demand of 20,000 tractors annually in Pakistan, imports from India would benefit agriculture. He said that Indian tractors were not more expensive than local tractors and would become even cheaper after local assembly.
Iqbal said that at present Pakistan needed 650,000 tractors immediately. He also said that the transport of tractors would be cheaper because of easy access from Wagah border.
Published in The Express Tribune, December 15th, 2012.
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