ISLAMABAD: The Ministry of Industries has cautioned the federal government that its aggressive trade liberalisation agenda could severely impact at least 15 key job-generating sectors if implemented too rapidly. The ministry has called for a phased rollout that begins with reducing tariffs on raw materials and intermediate goods, while excluding finished imported products in the initial phase.
The warning came ahead of the National Economic Council (NEC) meeting scheduled for June 9, where Prime Minister Shehbaz Sharif is expected to approve macroeconomic and development targets for FY2025-26—just one day before the federal budget is unveiled.
In a recent meeting of the steering committee reviewing the new National Tariff Policy, chaired by Finance Minister Muhammad Aurangzeb, several ministries expressed reservations about fully opening the economy to foreign competition next year. Industries officials highlighted risks of factory closures and job losses in sectors such as chemicals, polyester, iron and steel, automobiles, and ceramics.
Under the proposed policy, the number of customs duty slabs would be reduced from five to four: 0%, 5%, 10%, and 15%. However, industry leaders fear that lower duties on finished goods could lead to a surge in cheap imports, harming domestic manufacturers and worsening the balance of payments crisis, especially given Pakistan’s fragile foreign exchange reserves and recent rupee depreciation.
The Ministry of Commerce initially proposed a six-tier duty structure, but it was rejected by the prime minister. The steering committee has now opted to delay tariff cuts on finished goods, focusing instead on raw materials and semi-finished products.
Meanwhile, the NEC is expected to approve a GDP growth target of 4.2% for FY2025-26, up from 2.7% this year. The new Annual Development Plan will align with the government’s URAAN Pakistan strategy, prioritising exports, remittances, and foreign investment. The broader framework supports innovation, SME development, and the promotion of the "Made in Pakistan" brand to achieve sustainable and inclusive economic growth.
