By Dr.Sohail Rana, Chief Operating Officer, Power Vision Systems (Pvt) Ltd.
At a time when Pakistan is striving to strengthen its economy, create employment opportunities, and reduce pressure on its foreign exchange reserves, supporting local manufacturing should be a national priority. One of the sectors that deserves immediate attention is the local diesel generator coupling industry, which has been serving the country’s industrial, commercial, agricultural, and institutional power needs for decades.
The diesel generator coupling industry operates under the licensing and regulatory framework of the Engineering Development Board (EDB). It is a well-established sector that adds significant value to imported components by converting them into high-quality, locally assembled diesel generators. While diesel engines and alternators are generally imported, the remaining major components—including base frames, fuel tanks, acoustic canopies, control panels, wiring harnesses, exhaust systems, mounting structures, and other accessories—are manufactured locally. These components are then assembled, tested, and commissioned by highly skilled Pakistani engineers, designers, technicians, and craftsmen.
Over the years, Pakistan has developed a strong engineering base capable of producing diesel generators that meet international quality standards. Local manufacturers have invested heavily in manufacturing facilities, testing equipment, research and development, and workforce training. This industry supports hundreds of small and medium enterprises supplying fabricated parts, electrical components, sheet metal products, painting services, and other engineering solutions. Thousands of skilled workers earn their livelihood directly or indirectly from this sector.
However, the recent customs valuation policy introduced by the Federal Board of Revenue (FBR) on imported diesel engines has created serious challenges for the industry. The substantial increase in customs valuation has significantly raised the landed cost of diesel engines, making locally coupled generators much more expensive. As a result, many manufacturers are finding it increasingly difficult to continue production at competitive prices.
The consequences are already becoming visible. Several local coupling units have reduced production, postponed new investments, and slowed business operations due to uncertainty in import costs. Many skilled technicians and factory workers face the risk of downsizing, while investors who have spent years building manufacturing capabilities are suffering financial losses.
An unintended consequence of these policies is the increasing preference for importing Completely Built Units (CBUs). When importing finished generators becomes more economical than assembling them locally, the country loses the opportunity for value addition, local employment, technology development, and industrial growth. Moreover, the import of CBUs requires higher foreign exchange outflows, further increasing pressure on Pakistan’s already limited foreign currency reserves.
A similar concern exists in the tractor industry. Pakistan has successfully developed a strong local tractor manufacturing sector over many years. However, reducing import duties on imported tractors may unintentionally discourage local manufacturers by creating an uneven competitive environment. Such policies should be carefully reviewed to ensure that domestic industries remain competitive while encouraging investment and technological advancement.
Countries that have successfully built strong manufacturing economies have consistently protected and encouraged their local industries through balanced policies. Pakistan also needs a stable industrial policy that promotes local value addition.
The Government of Pakistan and the Federal Board of Revenue are respectfully requested to review the present customs valuation on imported diesel engines. A rational and transparent valuation mechanism will enable local manufacturers to remain competitive, preserve thousands of skilled jobs, encourage further investment, and promote industrial growth. Supporting the local diesel generator coupling industry will not only strengthen Pakistan’s engineering capabilities but will also reduce dependence on imported finished products and conserve valuable foreign exchange.
