INP-WealthPk

Pakistan Needs to Capture Wider Market for Export of Surgical Instruments

April 28, 2022

By Muhammad Asad Tahir Bhawana ISLAMABAD, April 28 (INP-WealthPK): A joint study of the Pakistan Business Council (PBC) and the Engineering Development Board (EDB) shows that Pakistan's surgical industry has shown modest growth over the last five years. The analysis of exports of surgical instruments reveals that Pakistan's market share of the global surgical products market has remained stagnant at 0.7% over the past 10 years. According to the study, quantity-wise exports of surgical products touched a peak in 2014 at over 238 million units of products. After that, they recorded a decline between 2015 to 2020. Moreover, the current data released by the Pakistan Bureau of Statistics (PBS) shows that the exports of surgical products declined in July-March 2021-22, registering a value of $307.690 million compared to the same period of the previous year when the exports were $324.314 million. According to the study of PBC and EDB, Pakistan's surgical industry is highly competitive and the competitive edge lies in its low cost of production. The average unit cost for exports is between $0.5 to $0.7. The industry is highly labour-intensive as around 20 stages of production need labour, requiring both skills and tools. Due to the lower labour cost, Pakistan can produce products cheaper. The city of Sialkot has become a cluster in production of surgical instruments. Pakistan has taken some steps to increase the economic value of surgical industry. The government formulated a Manufacturing Bond Scheme, allowing the producers to import duty-free inputs for subsequent exports. The Technical Education and Vocational Training Authority (Tevta) also plays a key role in providing skilled labour to the surgical industry. The Institute of Surgical Technology and Metal Industries Development Centre, which functions under Tevta, is playing a crucial role in this regard. Moreover, schemes such as Duty and Tax Remission for Exports (DTRE), Export Oriented Units (EOU) and Temporary Importation Scheme (TIS) are facilitating the industry to increase exports of surgical products. However, there are multiple reasons why Pakistan has yet to capture a larger portion of the world's surgical products market as the country currently exports such products to only 15 countries. Pakistan is still focusing on Europe, the US, and the UK, where the per-unit price is lower compared to African countries where the per-unit price is the highest. Along with a small number of export destinations, there are some other reasons hindering the development and higher exports of surgical industry. These obstacles include inadequate infrastructure, high cost of doing business, shortage of skilled labour, and a lack of common facility centres. To increase the contribution of this sector to exports, following steps are needed to be taken. Firstly, Pakistan should introduce a joint venture concept to fetch new investment and advanced technology. Secondly, the development of a surgical city near Sialkot will have everything needed for the production of surgical products. A separate location will make it a bigger cluster. Thirdly, ‘Made in Pakistan’ stamping on the product is necessary to advertise the Pakistan-made products in the world. Currently, there is an absence of this stamping on the export products. Because of this, no Pakistani brand has been recognised worldwide. Lastly, quality is a matter of serious concern. Surgical products must be furnished with high quality. Export quality check system must be put in place to recognise bad quality products because it harms the image of the industry, which ultimately leads to loss of trust in the international market.