ISLAMABAD: The Ministry of Commerce has initiated internal work on the Strategic Trade Policy Framework (STPF) 2025-30 and the National Tariff Policy.
The goal is to make exports more competitive and boost the country’s export performance, with proposals for private sector incentives.
The new trade policy and national tariff policy is being developed at a time when Pakistan is under an IMF program. Additionally, over 50% of the approved proposals from the 2020-25 Trade Policy have not been implemented.
National trade policy ineffective in simplifying tariff structure: report
The Commerce Ministry, which has been vocal about the Ministry of Finance and the Federal Board of Revenue (FBR) blocking fiscal incentives for the private sector, continues to push for these measures during budget discussions.
Sources confirmed that the Commerce Ministry has notified all relevant federal ministries, provincial chief secretaries, and officials from Azad Jammu & Kashmir (AJK) and Gilgit-Baltistan that the current STPF (2020-25) will expire in June 2025, and work on the new framework for 2025-30 is now underway.
The STPF is a five-year policy that sets the overall direction for Pakistan’s trade strategy. It identifies priority products, key sectors, and specific interventions for trade development, guiding the activities of the Ministry of Commerce and other government agencies on trade-related matters.
The Commerce Ministry has requested that relevant ministries and provincial governments share their input on the new STPF by January 10, 2025.
Sources also mentioned that the National Tariff Commission (NTC) and the Tariff Policy Centre (TPC) had reviewed 2,850 requests from over 150 public stakeholders in line with the objectives outlined in the National Tariff Policy (2019-24).
After review, the Sub-Committee on the Tariff Policy Board (TPB) reassessed the TPC’s recommendations. Out of 381 tariff lines/items proposed, 116 were fully implemented, 2 were partially implemented, and 263 were not implemented due to revenue constraints. The Ministry of Commerce believes that the non-implementation of these recommendations has negatively impacted Pakistan’s export performance.
The implementation of the National Tariff Policy (NTP) 2019-24 faced several unexpected challenges, such as the Covid-19 pandemic and financial constraints, which hindered trade flows and limited export growth. Another factor contributing to the slow implementation of the trade policy is the delay in the release of duty drawback claims.
Prime Minister Shehbaz Sharif has formed a committee focused on tariff rationalization, aiming to achieve an export target of $60 billion by 2027-28.
Pakistan’s export competitiveness has been undermined by several factors, including higher business costs, low product sophistication, expensive energy compared to competitors, low enterprise productivity, a cumbersome taxation system, higher tariffs on intermediate and capital goods, a lack of quality control, and an unattractive investment environment for the export-oriented sector.
The Strategic Trade Policy Framework 2020-25 was based on the following pillars: (i) rendering exports, a national priority and the primary driver of economic growth, that is both inclusive and sustainable, and is the main viable source of foreign exchange earnings; (ii) enhancement of exports via a collaborative and cohesive national effort engaging all relevant ministries, departments, government agencies and private sectors so as to ensure policy coherence; (iii) introduction of strategic interventions in priority sectors under ‘Make in Pakistan’ initiative.
These interventions have been identified in the Action Matrices; and (iv) alignment of Trade Policy in tandem with macro-economic framework and other national policies such as Taxation, Revenue, Textiles & Industrial Policy, etc. However, none of the proposals were implemented letter or spirit.
Copyright Business Recorder, 2025
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