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5th CEO Committee Meeting

The 5^th meeting of CEO’s Committee was held on 14^th December, 2022 at Committee Room, MoIP, Islamabad. The Federal Minister for Industries & Production, Syed Murtaza Mahmud chaired the Meeting. Mr. Tasneem Qureshi SAPM, Ms. Shahida Rehmani Parliamentary Secretary, MoIP, Mr. Imdadullah Bosal, Secretary- MoIP, Mr. Yousaf Hassan Bajwa, Chairman SIMAP attended as well as Chairman – EDB, and CEO SMEDA who joined the meeting through zoom.

A briefing was deliver by CEO NPO on the progress made on their Productivity Assessment Program (PAP) for the Surgical sector as they have completed studies in nine factories for which funding was provided by Punjab Small Industries Corporation (PSIC). The organization is further carrying out Capacity Building, Shop Floor Training and Implementation of Productivity Tools in the same. To solve the issue of notifying designed advanced CNC courses for surgical industry a meeting was held with DG-NAVTTC. NAVTTC informed that a course of “CNC Machinist Level -3” was developed and notified which is publicly available on NAVTTC website from where all the industries and stakeholders in surgical sector can get the desired advantage. Secretary I&P advised that Master Trainers can be trained to carry out capacity building of other industries on the subject as well. Federal Minister for MoIP viewed that there is a need to resolve main issues of surgical industry and presently Branding is one of them. He proposed to establish one registered company which can export on behalf of the surgical sector. SIMAP informed that compliance to the EU market entry regulations is a difficult task for the industry similarly there are a series of products, and the industry can’t afford $2000 for registration of each.

Chairman – EDB informed that India & China are exporting through compliant companies, it can be done in Pakistan also, if there is a will. Cost can be shared through different funds. NPO can be tasked to structure such company and NPO can arrange a foreign consultant to help branding in this sector.CEO – EDB was of the view that SIMAP will have to form this a company in the private sector as such arrangements in the public sector are difficult to manage. Secretary I & P also endorsed his views and advised SIMAP to work out a proposal in this direction.

Chairman – SIMAP gave a brief over view and informed that only one notifying body i-e SGS is operating in Pakistan to offer certification services however Govt has been requested to invite some other certification bodies for to start operations in Pakistan. A request for exemption of 17%GST was submitted to Minister, I&P who informed that GST could not be exempted due to present condition. It is also requested by SIMAP for establishing of a material bank whereas PC-I for SIMAP-CFC centre was approved by EDF but no funds were released. Chairman – EDB informed that establishment of CFC falls within the domain of TUSDEC.

A presentation on reverse engineering was given by GM (SDG) EDB, Mr. K.B.Ali who informed that a number of products / sectors were identified jointly by EDB, TUSDEC, KTDMC and PITAC for localization through reverse engineering. A number of meetings have been held with the stakeholders and the issues causing hindrances in localization through reverse engineering have been identified pertaining to manufacturers, funding and taxation.

CEO – EDB viewed that there is a need to define a roadmap for this exercise and the main organizations having the requisite facilities i.e. TUSDEC, KTDMC & PITAC to play an active role while EDB to coordinate and steer this activity.

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Engineering Development Board Proposed Subsidized E-Bike Scheme

The 4^th meeting of CEO’s Committee was held on 19^th September, 2022 at SIMAP office, Sialkot. Chaired by Syed Murtaza Mahmud, Federal Minister for Industries & Production, the meeting was attended by Chairman EDB, CEO EDB and senior officials of EDB, TEVTA, NAVTTC, TUSDEC, NPO and SIMAP.

During the meeting, the Federal Minister for I &P said that an export target of US$ 5 billion requires to be set for the industry which is only achievable if the industry would graduate from traditional instrument manufacturing to medical devices manufacturing and become a hub for global supply. For this purpose the industry needs to identify the bottlenecks so that the government can define future roadmap for bringing innovations and value addition in the product lines.

Chairman EDB informed that the industry must immediately start working for MDR compliance otherwise there will be a dip in the exports of surgical exports. The Minister assured full support of the government to address all challenges faced by the surgical instruments’ manufacturing industry of the country and advised the entire relevant department under the Ministry to coordinate with the companies so they can acquire technologies, certifications, infrastructure and experti

In a move to reduce usage of costlier fuel and protection of environment, Engineering Development Board under the supervision of Ministry of Industries & Production has devised an Electric Bike (E-Bike) Scheme, under which EDB has proposed subsidized and bank financing plans to promote the use of Two Wheelers (E-Bikes) in the country.For success of the program, three subsidy models for the scheme have been suggested.

Scheme-1 – Cash Purchase Model:

Government sharing Rs.100, 000 through banks as processing agents.
Consumer lump sum sharing of Rs. 70,000 from own source.

Scheme-2 – Price Sharing Model:

Rs 100,000 on sharing basis by government and consumer
70,000 as loan from banks (24 months)
50% Credit Guarantee by government

Scheme-3 – Easy Loan Model:

30% Down Payment by Consumer
36 months loan tenure
19% Interest Rate, 50% Credit Guarantee by government

Students with salaried parents, female students and employees (20% quota), transgender people (1% quota), government employees, private sector salaried and self-employed individuals with NTNs and bank accounts, government and armed forces pensioners, and imams duly qualified from an institute recognized by the government of Pakistan (endorsed by M/o Religious Affairs) would be eligible for the subsidized program.

To promote locally assembled E-bikes and allied parts (Lithium-Ion, swappable batteries), EDB has proposed charging at home or work place using personal chargers at government offices and universities.

Electric Bike (E-Bike) Scheme was also presented in the meeting of the Federal Cabinet on 23^rd Dec, 2022 in which a detailed briefing was given by officials of Engineering Development Board (EDB) and Ministry of Industries & Production regarding the generalization of the use of electric bikes across the country. The cabinet was told that the petrol-powered motorcycles in the country will be replaced by electric bikes in a phased manner.

CEO-EDB further informed that using electric bikes (E-Bikes) will not only save fuel, but these eco-friendly electric bikes (E-Bikes) will also reduce carbon emissions. It was highlighted that there are currently 90 companies which are manufacturing motorcycles and auto rickshaws in Pakistan and these companies have the capacity to manufacture 6 million motorcycles annually. Besides this, EDB has also issued 22 licenses to companies to manufacture electric bikes (E-Bikes) in Pakistan.

Prime Minister appreciated the efforts of EDB and MoIP and directed to submit a detailed plan regarding electric bikes (E-Bikes) to the Economic Coordination Committee (ECC), for further consideration and work on the financial model.

The Minister for I&P appreciated EDB for organizing the meeting and coordinating with the concerned departments from MoIP and provinces. Later, Minister for I&P along with the EDB team members visited EPZA – Sialkot, to discuss their issues. He assured his Ministry’s full support for resolving their problems.

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LIST OF LOCALLY MANUFACTURED GOODS

(CGO-04-2022 DATED 16.11.2022)

This is with reference to the list of locally manufactured goods notified vide CGO-04/2022 dated 16.11.2022 (available on EDB web-site: www.edb.gov.pk).

The above list was updated and notified after a period of more than 5-years replacing the previous list i.e. CGO-02/2017. The revised list (CGO-04/2022) certain amendments / corrections and new products also.
Further, while finalizing the list it was decided that the above GO list would be updated/ amended bi-annually and in this context and based on the several representations received from the importers of products covered in the above CGO list, EDB has started the process for necessary amendments/ updation in the list to be completed by the end of March, 2023. The same will be forwarded to the FBR after completing the necessary approval process. The list of the amendments in the current GO list is also available on EDB website as “proposed amendments in CGO-04/2022
In view of above, all the stakeholders are advised to furnish their views/ comments on the current list of CGO, latest by the end of February, 2023.
Furthermore, in order to avoid any consequences while availing concessions on the imported goods under Fifth Schedule of Customs Act, 1969 or any other concessionary notification, the importers are advised to seek confirmation/ clarification on local manufacturing status of the imported products at the time of opening Letter of Credit (LC).

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Solar Panel And Allied Equipment Manufacturing Policy

The Engineering Development Board (EDB) is all set to submit
its policy document on Solar Panels and Allied Equipment’s
Manufacturing to the Government by the end of this month. EDB
initiated working on this policy formulation some time back under
directions from its parent ministry, the Ministry of Industries &
Production and the EDB’s Board of Management. Over the last few
months, extensive consultations have been held with stake-holders
which include local manufacturers of solar panels, provincial energy
departments, research organizations, academia, users, and other
relevant organizations & departments in the federal and provincial
governments. The draft policy was presented in the 51st Board of
Management meeting of EDB held in June 2022 and EDB was
advised to hold a consultative workshop on the matter before
submission of the policy document to the government. The Policy is
expected to dovetail with the national solar energy policy being
prepared by the Ministry of Power and the Renewable Energy Task
Force under the leadership of the Prime Minister of Pakistan.
Today , Pakistan, is facing serious energy shortages with record
prices that had directly and indirectly affected all sectors of the
economy .The country’s electricity demand has reached almost
29,000 MW total whereas generation is about 22,000 MW creating a
considerable gap between generation and demand, resulting in load
shedding. With the present Government’s focus on setting solar set
ups it becomes imperative to promote localization & indigenization
of solar panels and its allied equipment in the country to save huge
out flow of foreign exchange.
The country’s power sector has a structural issue as its energy
generation mix is 40% based on indigenous resources while 60%
comprises imported oil fuel. The government has planned to increase
local share to 90% by 2030, out of which the targets set for
renewable energy is 20% to 30% which is currently around only

1.4% of the total installed capacity. Roof top solar system in
particular needs to be encouraged and incentivized as it is the
cheapest source of electric generation available today. In anticipation
of the upcoming government policies for incentivizing renewable,
especially solar energy, local industry has already made huge
investment for building local manufacturing capability and capacity
for solar panels and allied equipment whereas several other local as
well as foreign investors are waiting for the appropriate policies to
come out before they invest on the ground. Local manufacturing of
solar panels and allied equipment not only saves valuable foreign
exchange through localization, but also brings in investment and
provides skilled job opportunities for engineers and technicians.
The industry is currently using imported raw materials,
however in the coming years once local volumes build up, the
industry is planning to use local raw materials to further bring costs
down and decrease the country’s import bill. Glass and Aluminum
frame for the Panels in particular can easily be manufactured in
Pakistan due to the strong presence of this allied industry within the
country. If the industry is able to meet local demand for solar panels
in line with the government’s plans, the expected volumes can bring
local manufacturing costs down to a level where exports can also be
generated from the sector.
EDB has invited the panel manufacturers, provincial energy
departments, local EPC contractors, solution providers, foreign
consultants working in this field, research organizations, Academia,
users, and other relevant organizations / departments in the
federation. The highlights of the draft policy document shall be
shared in the workshop to get inputs from the stakeholders for
firming up the requisite recommendations.

51^st MEETING OF EDB BOARD OF MANAGEMENT

51^st Meeting of EDB Board of Management was held on 20^th June, 2022 at NFC Lahore under the chairmanship of Mr. Almas Hyder and attended by majority of the Board Members.

CEO-EDB briefed the Board on progress on assignments discussed in the previous Board meeting. He briefed on the development activities in respect of AIDEP (2021-26), Mobile Device Manufacturing Policy, Solar Panel and Allied Equipment Manufacturing Policy and Agriculture Implements Manufacturing Policy.

The Board was apprised that AIDEP encompassed promotion of small cars, promoting localization, incentivizing introduction of new products in tractors and motorcycles segments, consumer protection, promotion of new technologies i.e. EVs and Hybrids, export targets for OEMs etc. Major achievements include issuing EV manufacturing license issued to (10)ten 2/3 wheeler companies, updation of SRO 693(1)2006, implementation of WP-29 Safety Regulations through legislation w.e.f. July 01, 2022, payment of late delivery charges by OEMs to customers @ KIBOR + 3 percent. It was further informed that EDB has taken up the unimplemented recommendations of AIDEP with FBR.

The Board appreciated the success of Mobile Manufacturing Policy under which in the very first year, i.e. 2021, 70% handsets were manufactured locally whereas in the first four months of current year, i.e. Jan-Apr 2022, local manufacturing of mobile phones has reached 92% of total handsets sold in the country. He informed that the mobile manufacturing companies are facing problems in import of CKD/SKD due to recent restrictions by State Bank of Pakistan for establishing letter of credit which may result in halting of operation and even shut downs. The Board directed to take up the matter with concerned quarters on priority basis.

The Board was also informed that EDB has initiated the work on formulation of Policy to promote local manufacturing of “Solar Panels and Allied Equipment Manufacturing” and “Agricultural Machinery and Implements Manufacturing”. Several meetings, in this regard, have been held with the concerned stake-holders at federal and provinces levels to get suggestions for the proposed policies. Accordingly, based on the inputs / comments Policy documents are being finalized. The Board advised to hold consultative workshops on these policies in order to benefit from collective wisdom of concerned stakeholders.

MEETING ON MEDICAL DEVICE MANUFACTURING POLICY

A meeting was held on 29^th July, 2022 in Lahore SMEDA office to define future policy framework for development of Medical Device Manufacturing in Pakistan. The meeting was attended by representatives of EDB, NPO, TUSDEC, SMEDA and PBC. CEO-EDB highlighted that existing surgical instruments industry has multiple issues relating to branding, productivity, certification, MDR compliance, etc and suggested a coordinated approach to address their issues to increase their competitiveness and exports. Pakistan Business Council (PBC) gave a presentation on the joint EDB-PBC study on “Enhancing the Competitiveness of Pakistan’s Surgical Instruments Industry.” Subsequently GM (BDG)-EDB shared the policy brief highlighting the world scenario and Pakistan’s position, major imports of medical equipment under various H.S Codes and the proposed policy framework for import substitution and export enhancement. CEO SMEDA opined that the issues of the existing surgical instruments industry need to be dealt separately from the futuristic scenario of enabling development of a local Electro-Medical Device industry, while ensuring the engagement of SIMAP in both exercises. CEO-NPO offered to help the industry to improve productivity issues alongside improving wastages & rejections highlighted in the study. Director TUSDEC opined that new players in electro medical devices require being encouraged to enter this sector. Provincial Chief, SMEDA stressed the importance of addressing the MDR issue for exporters and countering the reverse trade problems in the sector. CEO-EDB also highlighted that development of a local Electro-Medical Device industry requires extensive consultation for which a National Consultative Workshop may be arranged so that all pertinent stakeholders should brainstorm and come up with a way forward.

EDB ATTENDS PAKISTAN AUTO SHOW 2022

The Pakistan Auto Show, organized by the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM), was held from 29^th July to 31^st July, 2022 at Lahore International Expo Centre. The three day event showcased the entire Auto engineering sector under one roof.

Syed Murtaza Mahmud, Minister of Industries & Production inaugurated the Auto Show 2022. The ribbon cutting ceremony was attended by Mr Almas Hyder Chairman EDB, Mr Raza Abbas Shah, CEO-EDB, Chairman and office bearers of PAPAM and renowned business leaders. A number of speakers highlighted different aspects of auto industry i.e. role of OEM’s in capacity building, electric vehicles and tractor industry, price competitiveness and indigenization of automotive industry. The various stalls showcased cars, motorcycles, commercial vehicles and automotive parts which are manufactured in Pakistan. Engineering Development Board also participated in the event by setting a stall for general Information and facilitation for engineering industry as well as for specific guidance with reference to AIDEP (2021-26).

Minister of Industries & Production assured the industrialist regarding all possible government support to resolve the issues related to auto sector. Chairman EDB spoke about the need of local raw materials, machine and tools and highlighted that if industry wants to remain stable against the volatile political and economical situation of the country then the auto parts manufacturers have to increase the exports. It is made obligatory in the AIDEP (2021-26) to export as a ratio of total import by an OEM’s. CEO-EDB highly appreciated PAAPAM for introducing the automotive market’s most recent technology, services, and solutions, as this exhibition provides excellent opportunities for leading brands and automotive accessories.

MEETING ON FREQUENT PRICE INCREASE BY LOCAL AUTOMOBILE MANUFACTURERS/ASSEMBLERS

A meeting of Auto Industry manufacturers was convened under the chairmanship of CEO-EDB on 3^rd August, 2022.The Meeting was attended by Joint Secretary LED-MOIP, GM-Policy-EDB and representatives of OEMs . The purpose of the meeting was to discuss matter of frequent price increases, progress on compliance to WP-29 Regulations, bookings & late delivery issues and exports.

CEO-EDB informed that Government is receiving numerous complaints due to price increases and consumers continue to suffer from delayed deliveries. Auto industry representatives were of the view that recent price escalation factors included PKR depreciation against USD, rise in freight cost, increase of input material cost in international market, and increase in cost of doing business. All these factors have a compound effect, which is causing continuous increase in prices of locally manufactured vehicles. CEO- EDB acknowledged that these factors have contributed to overall price hike however a mechanism of sharing of price revisions with EDB needs to be put in place whereby OEMs may share justification with EDB whenever they are constrained to increase prices.

The issue of non-compliance of AIDEP 2021-26 booking guidelines and late delivery of vehicles was discussed in the meeting and it was decided that OEMs/Association to present their comprehensive proposals on booking & delivery mechanism for consolidation by EDB and discussion in next meeting to be chaired by Secretary MoIP.

MEETING ON THE PREPARATION OF IMPORT SUBSTITUTION ITEMS FOR REVERSE ENGINEERING

A meeting on localization of engineering goods through reverse engineering was held on 11^th August, 2022 at EDB which was attended by representatives of EDB, TUSDEC, KTDMC and PITAC. The objective of the meeting was to prepare a list of items for import substitution. General Manager EDB highlighted that after the import of petroleum products, Pakistan imports a huge volume in electrical machinery, power generation equipment, transport equipment, plastic material, and in Iron & Steel.

Different steps are involved in reverse engineering i.e. information extraction, modeling through CAD & CAM, testing and review. Agricultural machinery, surgical implants and electro medical devices are the area where import substitution can be done for which 3-D printing facility can be utilized to get the prototype of reverse engineering. During the meeting, sectors were identified where imports can be substituted through local production through the process of reverse engineering. However, there is a need of feedback from local manufacturers/association for exploring the possibility of localization and capacity enhancement in the areas of import substitution.

MEETING ON SUPPORT FOR ENHANCEMENT OF PRODUCTIVITY AND EXPORTS OF SURGICAL INDUSTRY

A meeting on Support for Enhancement of productivity and Exports of Surgical Industry was held on 12^th August, 2022 at SIMAP office, Sialkot. The meeting was attended by President and senior officials of SIMAP, CEO EDB, CEO NPO, Provincial Chief SMEDA, GM TUSDEC and other officials.

CEO-EDB informed that the Federal Minister for Industries & Production has desired that the four MoIP organizations (EDB, NPO, SMEDA and TUSDEC) to should jointly work with the surgical industry to address their issues and support the surgical devices industry to improve its productivity and exports.

President of SIMAP informed that the industry has been adversely affected by the unilateral decision of the government to reduce Duty Drawback rates from 4.86% to 1.58% and submitted their proposals to IOCO for enhancement of the same to 8.9%.CEO-EDB informed that they have also taken up with M/o Commerce to provide DLTL to this industry as is being done for other major export oriented sectors.

Some of the issues identified by the industry included MDR Training & Compliance, Laboratories & Certification, Productivity improvement, Common Facility Centre, Marketing & Branding, Exhibitions, National Expo, Surgical City & EPZA.

It was decided that SIMAP should submit a comprehensive proposal addressing all the issues mentioned in the meeting which would then be taken up with concerned government ministries and departments for resolution. SMEDA and TUSDEC would jointly meet PCSIR to ascertain their capability and readiness to support the comprehensive testing requirements of the industry. The President of the Association appreciated the efforts of EDB and other organizations in facilitating the surgical industry which is expected to lead to greater value addition, imports substitution, employment generation and export enhancement.

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3^rd CEO’s Committee Meeting

The 3rd meeting of CEO’s Committee was held on 15th August, 2022 at Ministry of Industries & Production, Islamabad, chaired by the Federal Minister for Industries & Production. Meeting was attended by Parliamentary Secretary for I&P, Secretary I&P, Chairman EDB, senior officials of I&P and CEOs.

Secretary I&P gave background and rationale behind constitution of CEO’s Committee and emphasized on its regular meetings to facilitate the working of I&P Division. CEO EDB gave an overview of the decisions of the 2nd CEO Committee meeting related to EPZA, productivity improvement initiatives for surgical and cutlery sectors, feasibility of revival of Pakistan Gems & Jewelry Company, import substitution through reverse engineering, Medical device industry and export enhancement of Potato starch and Mango pulp.

Federal Minister advised that alternate export destinations of surgical industry be explored and many Central Asian states are interested to import surgical instruments from Pakistan. He mentioned that there was a gap between our industry and Commercial Councilors posted abroad which needs to be bridged in order to facilitate Pakistani exporters’ access to these foreign markets. He appreciated the idea of a national expo on Surgical/Medical devices, however he advised to also identify potential countries for trade shows in collaboration with TDAP. Federal Minister also directed to involve all stakeholders including TDAP in the proposed workshop on medical devices industry.

Chairman EDB remarked that for import substitution areas Electrical power equipment, solar, agricultural implements and mobile phone manufacturing have huge potential. Local demand for electricity would be around 50,000 Mega Watts in the coming years. He requested support of the Minister for supporting PC-1 prepared for addressing equipment needs of Rawat Lab which has a critical role in the meeting the testing requirement of the industry.

The Federal Minister also desired proposals for reducing barriers to entry in different industrial sectors. He showed keen interest in localization of Agriculture Implements and Solar Panels and desired EDB separately present what has been done so far in this regard.

It was decided that the next CEO committee meeting would be on September 05, 2022 at Sialkot to specifically focus on issues of industry there. Concerned departments i.e. EDB, TUSDEC, NPO, SMEDA, and EPZA will attend. In addition provincial departments like Punjab Small Industrial Corporation, TEVTA, NAVTEC, and district administration officials may also be invited to attend.

2^nd MEETING OF AUTO INDUSTRY DEVELOPMENT COMMITTEE

The 2^nd meeting of the Auto Industry Development and Export Committee (AIDEC) was held on 16^th August, 2022 at Engineering Development Board under the chairmanship of Mr. Raza Abbas, CEO- EDB.

Syed Murtaza Mahmud, Honorable Minister for Industries and Production also graced the occasion with his presence. Meeting was attended by senior officials from Engineering Development Board (EDB), Federal Board of Revenue (FBR), Pakistan Association of Automotive Parts and Accessories Manufacturer (PAAPAM), Higher Education Commission, Ministry of Commerce and Ministry of Science & Technology along with representatives from automotive industry.

CEO-EDB informed that Government is receiving numerous complaints due to price increase by various OEMs and lack of safety features in the locally manufactured vehicles. Auto consumers of Pakistan continue to suffer from delayed deliveries, frequent price revisions, menace of premium on money and lack of choices among affordable cars in the market. Auto Industry representatives were of the view that factors for price increases are Pak Rs. depreciation, increase in freight costs, increase in prices of raw materials and enhancement of taxes by government, in particular FED. All these factors have a compound effect, which is causing continuous increase in prices of locally manufactured vehicles.

Syed Murtaza Mahmud, Minister of Industries and Production remarked that Pakistan is passing through challenging times and the government has taken measures to control trade deficit. However, PKR is appreciating again due to government efforts and industry should accordingly consider decrease in prices. Secretary AIDEC informed the house that few companies have recently decreased prices which sent a positive signal and that similar steps are expected from other OEMs. He added reduction in prices due to decrease in input cost is a positive step for customer welfare.

The Federal Minister emphasized that Pakistan cannot depend on imports. He explained that Uzbekistan has only one automotive manufacturer and they are making high value parts like engine, transmission etc. Pakistan needs to focus on import substitution and export enhancement. The Federal Minister asked EDB to coordinate with PAAPAM & PAMA and submit proposal for localization and exports of high value added parts as well as safety features compliance report to the Ministry by 31^stDecember, 2022 for implementation in Finance Bill.

Special Assistant to Prime Minister for Industries and Production visits Engineering Development Board

Special Assistant to Prime Minister for Industries and Production, Mr. Tasneem Ahmed Qureshi,visited Engineering Development Board on 16 th November, 2022 where he was given a briefing on EDB by the CEO-EDB and his team. He was informed that EDB has been tasked by the
government to formulate and coordinate all government policies relating to the engineering sector and develop a long-term vision for the development of the engineering sector. EDB works with various engineering clusters for their uplift, development, import substitution and exports enhancement. A number of policies have been formulated to provide a long-term roadmap for development of certain sectors of the engineering industry.
Under EDB’s Mobile Device Manufacturing Policy spearheaded by EDB, local manufacturing of mobile devices have been incentivized and more than 30 manufacturing concerns have been established for locally producing mobile handsets and the share of local manufacturing has
reached 92% of total mobile phones sold in 2021. All the major international players like Samsung, Nokia, Vivo, Oppo, Xiaomi , Tecno, Infinix etc have started manufacturing in Pakistan and approximately USD 75 Million invested and 11,000+ skilled jobs have been created so far. CEO-EDB briefed that under Automotive Industry Development and Export Plan (AIDEP 2021-26), which is a continuation of previous policies for the automotive sector and includes major incentives for promotion of localization and import substitution, new product development
in tractors and motorcycles, promotion new technologies including EVs and hybrids to target export markets.
Major policies under development by EDB include Solar Panels Manufacturing Policy,Agriculture Implements Manufacturing Policy and Petrochemical Policy. Over the last few months, extensive consultations have been held with the stakeholders including local manufacturers of respective industries, academia, users, and relevant organizations &
departments in the federal and provincial governments to finalize these policies. It is hoped that EDB shall soon submit these policies to relevant forums for approval. He also informed that in addition to the policies, EDB manages various government regulations for the benefit of the local
engineering industry.

Mr. Tasneem Ahmed Qureshi highly appreciated the steps being taken by EDB for the engineering industry and assured his support in facilitating the local industry. He believed that with little investment the engineering industry can be promoted to become a leading export sector of the economy. He emphasized the need for all the organizations under MoIP to work together to address the issues being faced by engineering industry and increase its contribution to GDP, employment generation and exports enhancement. He directed EDB to develop feasibilities and models for entrepreneurs and investors especially in second tier cities of the
country to encourage them to invest in the industrial sector, which can then be shared with them through the relevant chambers of commerce and industry.

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CGO-04/2022 DATED 16.11.2022 (LIST OF LOCALLY MANUFACTURED GOODS)

Federal Board of Revenue (FBR), vide Customs General Order (CGO)-04/2022 has notified the List of Locally Manufactured Goods on 16^th November 2022. This list is maintained/updated by Engineering Development Board (EDB and notified by FBR. This list was updated on 19^th April 2017 and notified as CGO-02/2017.

The List of Locally Manufactured Goods is a reference document to protect the local industry from concessionary imports and is used FBR field formations for evaluation of imported goods. Products covered in CGO are treated as Engineering Goods, and the document contains product details including HS Code, Description, Specifications, Physical/Chemical properties and Company name. This is however not an exhaustive list.

Initially this list was drawn up by FBR as an “Indicative List” based on information provided by the Ministry of Industries & Production (MoIP). EDB revised the list first time in 1998 and notified CGO-7 dated 24.03.1998 and subsequently was revised/ updated as CGO-12 in 2002, CGO-10 in 2003, CGO-11 in 2007 and CGO-02/2017.

The process of revision of the CGO-04/2022 was initiated in 2018-19 through placing the list on EDB website as well as approaching all stakeholders, associations, chambers and industries through letters, emails and newspaper for seeking comments. Accordingly, based on their comments, the list was amended / updated and placed on EDB web-site several times and finally draft list was placed before EDB-BOM on 17.12.2021 and approved with the direction to revise/update the list biannually for new products inclusion and overall revision after every three years. Subsequently, this list was approved by the Ministry of Industries and Production in September, 2022, after consulting the FPCCI and Ministry of Commerce.

In this revision process, around 235 companies responded for inclusion of new items, deletion of old entries and/or amendments of existing entries. Companies requesting for inclusion of new products were also visited for facilities verification.

This list of goods contained in CGO-04/2022 is placed at EDB website and would now be updated bi-annually and its overall revision / updation will be made after every 3 years.

52^ndMeeting of EDB’s Board of Management

52^nd Meeting of EDB’s Board of Management was held on 21^st October, 2022 at NFC, Lahore and attended by majority of the Board Members.

CEO, EDB gave a brief background of the subject, which started with the State Bank of Pakistan (SBP) issuing circular no 9 & 11 of 2022 which defined a restrictive mechanism of obtaining prior approval of SBP for import of goods, especially under HS Codes/Goods category 84 & 85, and which has severely and adversely impacted the normal business operations across the industry, especially engineering, sectors. Under this regime, authorized Dealers/Banks were directed to seek prior permission from Foreign Exchange Operations Department (FEOD), SBP-BSC before initiating transactions for import of certain goods. He informed that as a result of these restrictions LSM showed a decline of 16.4% in July 2022 as compared to the same period of the previous year and that subsequent decline is expected to be worse. Limited, quota-based, imports were allowed in Aug-Sept, however sector Specific Problems continued. A Committee was constituted to monitor the implementation which comprised of Secretary MoIP, Secretary Commerce & Deputy Governor SBP. CEO EDB co-opted member from industry’s side.

The Board members representing their respective sectors were of the view that said restrictions has resulted in low capacity utilization in various engineering manufacturing sectors including automobile sector, auto part manufacturers, domestic appliances, power equipment and mobile phone manufacturing companies, and has resulted in lay-offs & increase in non-production days. Imports practically stopped after May 20, 2022 till August 2022 when this regime was put in place.

The Board directed that recommendations from various engineering sectors through their respective associations be solicited and these be compiled and communicated to the Government.

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4^th MEETING OF CEO COMMITTEE

WORKSHOP ON SOLAR PANEL & ALLIED EQUIPMENT MANUFACTURING POLICY

A workshop on Solar Panel & Allied Equipment Manufacturing Policy was organized by Engineering Development Board on 4^th October 2022 at Serena Hotel, Islamabad with the purpose of consulting stakeholders on policy formulation for local manufacturing of Solar Panels. The purpose of this consultative workshop was to get input from the industry on the draft policy and to further improve the policy framework with the basic aim to provide a level playing field for encouraging local manufacturing for import substitution and creating surplus for export.

CEO EDB while addressing the participants opined that if the industry is able to meet local demand for solar panels in line with the government’s plans, the expected volumes can bring local manufacturing costs down to a level where exports can also be generated from the sector. He assured that EDB is available for all the requisite support and facilitation to the local manufacturers to work for this task of national importance. Chairman EDB BoM, Mr. Almas Hyder, appreciated all the stakeholders from various governments and private sector for their keen interest and enthusiastic participation on this workshop.

Federal Minister for Industries & Production, Syed Murtaza Mahmud Minister, in his closing remarks, recognized the formulation of solar policy as need of the hour in view of the energy crises situation the country is facing today in the form of shortages of electricity as well as price escalation. The minister informed that the Prime Minister had already accorded an approval of a plan to generate 10,000 MW to overcome the crises of energy through solar and emphasized on an urgent need to look for opportunities for promoting and incentivizing local manufacturing of Solar Panels and Allied Equipment to tap Pakistan’s energy demand.

Engineering Development Board is all set to submit its final policy document on Solar Panel and Allied Equipment Manufacturing to the Government. Over the last few months, extensive consultations have been held with the stakeholders and all the findings were shaped up in the form of draft of Solar Policy. Earlier the draft policy was put up to the EDB Board of Management who advised to share with stakeholders to seek further inputs and suggestions through a consultative workshop.

Policy Vision:

To make Pakistan a regional hub for manufacturing solar panels and allied equipment
To facilitate investors for solar panel manufacturing to serve domestic as well as export markets
To achieve progressive value addition and ecosystem:

Policy Objectives:

To develop Tier 1 local solar equipment manufacturing, skilled human resource and technology
Enable private sector investment in all segments of Solar Panels and Allied Equipment manufacturing.
Encourage investment in solar cell manufacturing in Pakistan for local as well as international market.
Encourage integration of the local industry with the global solar system supply/value chain.
Meet the objective of generating employment through Green Economy initiatives.
Encourage development of a solar manufacturing eco-system through supporting developing of affiliated industry such as solar inverter, solar pump drive and solar battery, etc.
Support development of an internationally accredited testing system for Solar Panels and Allied Equipment within the country.

Policy Interventions/Recommendations:

Exemption from all duties & taxes on import of Plant, Machinery, Equipment and Materials for New, BMRE of panels plants, parts and allied equipment manufacturers.
Exemption from duties and taxes on import of inputs (CKD & raw materials, sub-components, components, sub-assemblies) used in manufacturing of solar panels, parts and allied equipment.
Equal treatment in Sales Tax for local manufacturers’ viz-a-viz importers.
Exemption from deduction of 4% withholding tax on locally manufactured panels
Exemption from Minimum Turnover Tax on local manufacturers of solar equipment.
Implementation of Road Map for Localization.
Implementation of Road Map for Rationalization of Duties and Taxes.
Inclusion of Solar equipment in DLTL scheme with a 10% export rebate incentive.
R & D support @ 10% on export of solar panels and allied equipments.
Fixation of Rebate on Exports of Solar PV Modules, parts and allied equipments
Set-up of R & D facilities for Solar PV Modules, parts and allied equipments in collaboration with MoST and accamedia. (Constitute a sub-committee)
Government support in obtaining international certification like CE, TUV, UL, EU certification, etc (MoC, EDF)
Ten Year Tax Holidays for existing, setting-up new plant and BMRE of Solar Panel and allied equipment manufacturers.
Preference to the locally made panels in government procurement as per SRO 827(I)/2001.
Government procurements / projects of Solar energy may have at least 20% share of local panels.
Government support for B2B and G2G cooperation for R & D and technology acquisition/transfer.
Bank financing / loans at low interest rates for setting up local manufacturing solar cells & panels plants.
Government support in establishing international standard laboratories within the country which are capable to perform all requisite tests for quality/standards of Panels and Allied equipment.
Upgradation of existing labs available at NUST, PCRET and other universities
Government support in certification of locally manufactured solar panel according to IEC standards forms the accredited laboratories like TUV to sell their products in local market.
Land/ infrastructure to be given to solar park developers & solar panels manufacturing plants on priority.
One-Window facilitation for setting up of solar power plants around all cities.
Constitution of a Solar Policy Implementation and Review Committee
A consistent 10 years policy framework for solar panels, parts & allied equipment manufacturing industry to enable long term investment by domestic & global companies

Special Assistant to Prime Minister for Industries and Production visits Engineering Development Board

Special Assistant to Prime Minister for Industries and Production, Mr. Tasneem Ahmed Qureshi, visited Engineering Development Board on 16^th November, 2022 where he was given a briefing on EDB by the CEO-EDB and his team. He was informed that EDB has been tasked by the government to formulate and coordinate all government policies relating to the engineering sector and develop a long-term vision for the development of the engineering sector. EDB works with various engineering clusters for their uplift, development, import substitution and exports enhancement. A number of policies have been formulated to provide a long-term roadmap for development of certain sectors of the engineering industry.

Under EDB’s Mobile Device Manufacturing Policy spearheaded by EDB, local manufacturing of mobile devices have been incentivized and more than 30 manufacturing concerns have been established for locally producing mobile handsets and the share of local manufacturing has reached 92% of total mobile phones sold in 2021. All the major international players like Samsung, Nokia, Vivo, Oppo, Xiaomi , Tecno, Infinix etc have started manufacturing in Pakistan and approximately USD 75 Million invested and 11,000+ skilled jobs have been created so far. CEO-EDB briefed that under Automotive Industry Development and Export Plan (AIDEP 2021-26), which is a continuation of previous policies for the automotive sector and includes major incentives for promotion of localization and import substitution, new product development in tractors and motorcycles, promotion new technologies including EVs and hybrids to target export markets.

Major policies under development by EDB include Solar Panels Manufacturing Policy, Agriculture Implements Manufacturing Policy and Petrochemical Policy. Over the last few months, extensive consultations have been held with the stakeholders including local manufacturers of respective industries, academia, users, and relevant organizations & departments in the federal and provincial governments to finalize these policies. It is hoped that EDB shall soon submit these policies to relevant forums for approval. He also informed that in addition to the policies, EDB manages various government regulations for the benefit of the local engineering industry.

Mr. Tasneem Ahmed Qureshi highly appreciated the steps being taken by EDB for the engineering industry and assured his support in facilitating the local industry. He believed that with little investment the engineering industry can be promoted to become a leading export sector of the economy. He emphasized the need for all the organizations under MoIP to work together to address the issues being faced by engineering industry and increase its contribution to GDP, employment generation and exports enhancement. He directed EDB to develop feasibilities and models for entrepreneurs and investors especially in second tier cities of the country to encourage them to invest in the industrial sector, which can then be shared with them through the relevant chambers of commerce and industry.

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