ISLAMABAD: Ahead of the upcoming budget, the Pakistan Business Council (PBC) on Friday warned the commerce ministry that abrupt across-the-board duty cuts could adversely affect domestic manufacturing, government revenues, and industrial investment.

A PBC delegation, comprising leading industrial stakeholders, including the CEO of Gatron Industries Ltd and Novatex Ltd, Taimur Dawood, met Commerce Min­ister Jam Kamal Khan to discuss ind­ustrial competitiveness, tariff rationalisation, export sustainability, and the challenges facing the manufacturing sector.

Last year, the government announced a five-year plan to phase out additional customs and regulatory duties and to reduce overall duty on all items, along with exemptions for raw materials, over a period of five years.

An official announcement issued after the meeting said participants discussed the broader impact of tariff reforms, anti-dumping duties, and the cost structure affecting local industries, particularly the petrochemical, plastics, polyester, and SME sectors.

Council says move risks manufacturing, revenue and industrial investment

Industrial representatives informed the minister that while tariff rationalisation and trade liberalisation were important objectives, across-the-board duty reductions could adversely affect domestic manufacturing and industrial investment. They stressed the importance of distinguishing between genuine industrial exporters and trading activities that rely heavily on imports without contributing significantly to local value addition.

Commerce Minister Jam Kamal emphasised that Pakistan’s industrial and export ecosystem must support long-term manufacturing growth and sustainable industrialisation. He observed that emerging industries require time, infrastructure development, capital recovery, and policy stability before becoming globally competitive exporters.

He stated that policy decisions should remain responsive to changing economic realities and geopolitical developments. He noted that Pakistan’s economic environment differs significantly from many regional competitors due to security challenges, energy costs, law-and-order concerns, and regional uncertainties, making direct comparisons with other economies difficult.

The PBC highlighted concerns about the informal economy and uneven enf­orcement, noting that compliant industries often face unfair competition from undocumented commercial importers and unregulated sectors operating outside the tax and regulatory framework.

The minister stressed the importance of stronger enforcement mechanisms to ensure fair competition and protect registered industries contributing to the formal economy. He observed that sustainable industrial growth requires balanced policymaking, consistent implementation, and effective regulatory oversight.

The meeting also discussed challenges faced by the petrochemical and downstream chemical industries due to fluctuating global raw material prices, high production costs, and changing international market dynamics.

Published in Dawn, May 9th, 2026