The federal government is set to announce a major tariff relief package in the FY2026-27 budget, aimed at reducing the cost of industrial raw materials and other imported inputs used by local manufacturers.
The proposed measures are part of the National Tariff Policy 2025-30 and are expected to provide relief worth around Rs. 200 billion to industry.
Under the plan, the government will reduce or remove Additional Customs Duty (ACD) on thousands of imported items used in manufacturing.
According to details, 2 percent ACD will be completely abolished on 518 tariff lines that currently fall under the 15 percent customs duty slab.
Similarly, 4 percent ACD will be reduced to 2 percent on 2,166 tariff lines that currently face a 20 percent customs duty.
In addition, 6 percent ACD will be cut to 4 percent on 465 tariff lines where customs duty is above 20 percent.
Overall, the ACD cuts will apply to 3,149 tariff lines, mainly covering industrial raw materials, intermediate goods, and manufacturing inputs.
The government is also planning major cuts in Regulatory Duties (RD). Under the proposal, the maximum RD will be brought down from 50 percent to 20 percent on around 1,948 tariff lines. On average, RD rates are expected to fall by nearly 20 percent.
These relief measures are expected to benefit a wide range of sectors, including textiles, engineering, chemicals, plastics, iron and steel, pharmaceuticals, auto parts, batteries, and other export-oriented industries.
Officials believe the tariff cuts will lower the cost of imported materials for local manufacturers, reduce production expenses, improve efficiency, and make Pakistani products more competitive in global markets.
The reforms are part of the government’s broader plan to gradually phase out Additional Customs Duties over four years and Regulatory Duties over five years under the National Tariff Policy 2025-30.
The policy also aims to simplify Pakistan’s tariff structure, reduce protection for inefficient sectors, and support export-led growth by helping local industry become more competitive and better connected with global supply chains.
In simple terms, the government wants to make imported raw materials cheaper for factories so businesses can produce goods at lower cost, boost exports, and improve industrial growth.
If approved in the budget, the package is likely to be seen as a major relief for manufacturers, especially at a time when industries are facing high input costs and pressure on competitiveness.
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