ISLAMABAD: The federal government has unveiled the National Industrial Policy 2025–30, an extensive blueprint aimed at reviving Pakistan’s struggling manufacturing base, rationalizing tariffs, and restoring investor confidence through regulatory and tax reforms.
Prepared after months of consultations with the private sector and government institutions, the policy pledges to shift Pakistan away from decades of import substitution and protectionism toward a competitive, export-led model. Officials have described it as the “industrial backbone” of the Prime Minister’s Economic Transformation Agenda.
However, while the policy lays out a detailed reform path including tariff cuts, deregulation, and revival of sick units many economists and business leaders caution that implementation capacity, political continuity, and fiscal constraints will determine whether these commitments can be sustained beyond paper.
According to the document, Pakistan’s industrial strategy will now be guided by three objectives: boosting industrial investment, growing exports to $60 billion by 2030, and maintaining macroeconomic stability. The reforms are designed to remain consistent with the country’s IMF programme, avoiding new subsidies or large fiscal spending while focusing on structural change.
A major development under the policy is the move to a simplified four-tier customs duty structure 0%, 5%, 10%, and 15% within five years, while phasing out all Additional and Regulatory Duties. The government claims this reform alone could yield Rs175 billion in cost savings to industry this year, though analysts note that such savings will depend on how quickly tariff rationalization translates into lower input costs.
The policy also reiterates the government’s commitment to an open and predictable trade environment, calling for the elimination of “distortive” Statutory Regulatory Orders (SROs) and the alignment of Pakistan’s tariff regime with those of export-oriented economies such as Vietnam and Malaysia.
On the energy front, the plan proposes reduced wheeling charges, special tariffs for greenfield industries, and a shift from capacity-based to growth-supporting power planning. Yet, given the circular debt crisis and the sector’s existing cross-subsidies, industrial stakeholders remain skeptical about how such measures will be financed or enforced.
The policy’s “Regulatory Guillotine Initiative” — which has already removed or simplified 465 business regulations — aims to save firms over Rs250 billion annually. The proposed Asaan Karobar Act 2025 will anchor these reforms in law, promising to make the regulatory environment “predictable, transparent, and harassment-free.”
While business chambers have welcomed these initiatives, some observers argue that past efforts at regulatory simplification often failed due to weak inter-agency coordination and provincial-level resistance. “The intention is right, but Pakistan’s regulatory culture doesn’t change overnight,” a senior industry representative said, requesting anonymity.
Another major component of the policy is the National Industrial Revival Commission (NIRC), tasked with reviving non-performing industrial units through restructuring, mergers, or acquisitions. The accompanying debt-resolution framework with the State Bank and SECP aims to provide a lifeline to firms struggling with high borrowing costs and outdated technology. Experts, however, warn that without clear criteria for viability and transparency, such interventions risk reviving “zombie firms” rather than fostering competitiveness.
The policy also outlines a phased reduction in corporate tax from 29% to 25–26%, a gradual abolition of super tax, and faster refund mechanisms to ease liquidity pressures. Industry groups have long demanded these steps, though many remain cautious until they see visible implementation.
Reforms to Special Economic Zones (SEZs) are also being introduced, including digitized one-stop shops for land and permits, leasing models to make plots more affordable, and women-centric industrial units within larger estates. The government has pledged to curb misuse of SEZ land for real-estate purposes a recurring concern among genuine industrial investors.
The document promises stronger intellectual property protection through Pakistan’s membership in the Patent Cooperation Treaty (PCT), along with the streamlining of customs, port charges, and trade procedures to cut logistics costs. It also emphasizes a market-determined exchange rate to support exporters’ access to foreign exchange.
The government projects that manufacturing growth could rise to 8 percent annually by 2030, supported by greater private investment and export diversification. Yet, much will depend on how well Pakistan sustains macroeconomic stability, reduces policy volatility, and attracts long-term investors — areas where previous industrial strategies faltered.
In the words of one economist involved in the consultation process, “The new policy checks many of the right boxes rational tariffs, credit access, and regulatory reform but without consistent execution and political ownership, it risks becoming another well-written document rather than a real industrial transformation.”
