Govt warns against sudden tariff cuts

May 08, 2026 (MLN): Industrial development, tariff rationalization, export sustainability, and manufacturing competitiveness remained the key focus during a high-level meeting between Federal Minister for Commerce Jam Kamal Khan, representatives of the Pakistan Business Council, and leading industrial stakeholders.

The meeting was attended by prominent business leaders, including Taimur Dawood, where participants discussed challenges facing Pakistan’s manufacturing sector, particularly the petrochemical, polyester, plastics, and SME industries, according to APP.

Industry representatives informed the Commerce Ministry that while trade liberalization and tariff rationalization remain important policy objectives, abrupt and across-the-board reductions in duties could negatively impact domestic manufacturing, industrial investment, and government revenues.

Stakeholders emphasized the need to distinguish between genuine industrial exporters and trading activities that rely heavily on imports with limited local value addition.

They maintained that policy support should prioritize industries contributing to exports, employment generation, and local manufacturing capacity.

During the discussions, Jam Kamal Khan stressed that Pakistan’s industrial and export ecosystem must remain focused on long-term manufacturing growth and sustainable industrialization.

He observed that emerging industries require time, infrastructure support, investment recovery, and policy consistency before becoming globally competitive.

The Minister also highlighted that Pakistan’s economic conditions differ significantly from many regional economies due to factors such as security challenges, elevated energy costs, law-and-order concerns, and regional geopolitical uncertainties.

Participants further raised concerns regarding the informal economy and weak enforcement mechanisms, stating that documented and tax-compliant industries often face unfair competition from undocumented importers and unregulated sectors operating outside the formal regulatory framework.

Jam Kamal Khan underscored the importance of stronger enforcement and regulatory oversight to ensure fair competition and support industries contributing to the formal economy.

He noted that sustainable industrial growth depends on balanced policymaking, effective implementation, and long-term policy stability.

The meeting also reviewed challenges confronting Pakistan’s petrochemical and downstream chemical industries amid fluctuating global raw material prices, rising production costs, and changing international market dynamics.

Stakeholders highlighted the strategic importance of petrochemicals, PVC, plastics, and value-added manufacturing industries for future industrial growth and export diversification.

Industrial representatives also briefed the Commerce Minister on ongoing and planned investments in Pakistan’s manufacturing sector, including expansion projects involving foreign investors and international partners.

They stressed that stable industrial policies and supportive tariff structures remain essential for attracting further investment and strengthening industrial self-reliance.

Referring to global industrial development models in South Korea, China, Japan, and the United States, Jam Kamal Khan observed that strong domestic industries are built gradually through phased protection, policy consistency, investment facilitation, and market stabilization.

The Commerce Minister reaffirmed the government’s commitment to continued consultations with the business community to formulate practical and balanced trade policies aimed at boosting exports, strengthening manufacturing, supporting SMEs, and improving Pakistan’s long-term economic resilience.

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