New Tariff Policy Sparks Concerns Among Manufacturers

News Desk

ISLAMABAD: Pakistan’s recent implementation of the National Tariff Policy 2025-30 has raised alarms within the manufacturing sector, which is now facing significant challenges as the government seeks to reshape the economy.

This policy, influenced by the World Bank’s 2022 report, aims to address the country’s low export-to-GDP ratio but has inadvertently created a scenario where local manufacturers may prioritize domestic profits over international competitiveness.

The World Bank’s report highlights the concept of ‘anti-export bias’ as a critical factor contributing to Pakistan’s economic struggles.

It ranks Pakistan as having the second-highest tariff cascading globally, trailing only Egypt.

This structure incentivizes manufacturers to focus on high-margin domestic markets, often at the expense of lower-margin exports. For instance, a 10% import tariff on a $100 bike would inflate its price to $110 domestically, allowing local producers to increase their prices and profits without venturing into the export market.

This shift in focus could have far-reaching implications for Pakistan’s economy, potentially stifling growth in the export sector and limiting job creation.

As manufacturers become more reliant on domestic sales, the country risks falling further behind in global trade, which could exacerbate existing economic challenges and hinder sustainable growth.

Looking ahead, stakeholders are calling for a reassessment of the tariff policy to ensure it fosters a more balanced approach that encourages exports.

Upcoming discussions among policymakers and industry leaders will be crucial in determining the future direction of Pakistan’s economic strategy.