The Competition Commission of Pakistan has called for a national steel policy and stronger governance after identifying major distortions in one of Pakistan’s most critical industrial sectors.
The report stresses that without policy reform and strict enforcement, compliant steelmakers will continue to suffer while substandard and untaxed players gain unfair advantage.
The study, titled Competition Assessment Study of the Steel Sector in Pakistan, finds that steel remains the backbone of manufacturing and infrastructure development but is constrained by poor regulation and high input costs.
Large Scale Manufacturing makes up more than 69 percent of industry output and 8.2 percent of GDP.
Yet Pakistan’s annual steel production of 8.4 million tons and very low per capita consumption of 47 kilograms point to weak industrial activity and stalled infrastructure growth.
The CCP notes that Pakistan’s industry depends heavily on imported scrap, leaving costs exposed to global volatility.
Pakistan Steel Mills, once a flagship strategic asset with 1.1 million ton production capacity, has remained shut since 2015 and now carries liabilities of about Rs 400 billion.
In comparison, China and India scaled up through coordinated policy support and long-term investment in technology and raw materials. Regulatory uncertainty is a recurring theme in the report. Frequent changes in tax notifications, weak quality enforcement and fragmented oversight allow 50 percent to 60 percent of domestic production to bypass standards.
Untaxed steel from the former FATA and PATA areas also continues to flow into mainstream markets, causing an estimated Rs 40 billion in annual revenue losses.
The report recommends a dedicated Steel Ministry, improved coordination between industrial regulators, stricter quality enforcement and elimination of tax distortions.
It also pushes for new technologies such as Direct Reduced Iron, incentives for local iron ore mining and support for energy-efficient production to improve competitiveness.
The CCP says it will work with stakeholders to ensure reforms that promote fair competition and long-term sustainability in line with international best practice. The report is available on the Commission’s website.
