Steel industry warns tariff cuts could lead to shutdowns

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ISLAMABAD: The steel industry has warned the government to close the government in the next two years due to the implementation of a national tariff’s policy. Industry leaders believe that the average import tariff on steel products on steel products in 2025-26 will be reduced from 55 % to 44 %.

“If the tariff is planned for 2026-27, we will have no choice but to close our operations,” the steel industry executives said during a press conference on Friday. After the closure of Pakistan Steel Mills, private players collectively invested more than Rs 1 trillion in this sector, between 40 billion and Rs 50 billion in each unit. Industry representatives have warned that at the pace of government policy, the country is in danger of turning the country into a “commercial economy”.

In a joint media briefing, the Pakistan Association of Large Steel Producers (PALSP) patron in the Chief, Abbas Akbarli and Chairperson of Amri Steel, along with the Chairperson of the Fallip, Javi, Vice Chairperson Elius Eziz Malik and Secretary General Wanj Bokhari. He called on the authorities to engage with the industry to create a 10 -year roadmap to reduce the cost of doing business, enabling local producers to cope with global giants like China.

He called for a reduction in electricity tariffs 14 cents to 7 cents per kW and low prices of gas and furnace oil to ensure the level of playground. In recent years, only Amri Steel has reduced its manpower by 25 to 30 percent. Other companies have deducted a similar deduction.

Although some recent government initiatives, such as reduction in power costs and low interest rates have brought limited relief, are the highest in both the region. The industry welcomed the gradual withdrawal of tax exemptions for the previous FATA and Peta areas, but questioned whether the move would survive the budget process, remembering last year’s reversal in the eleventh hour.

Industry leaders criticized the government for assigning tariff rationality work, some of them foreigners, who say, lacking understanding of Pakistan’s industrial realities and the operational environment of the steel sector. He said key ministries, including trade and industries, are being removed in the process of making tariff decisions. He also emphasized that the government should first introduce reforms to encourage tariff deductions as well as local iron extraction. He said it would help promote the availability of raw materials, reduce production costs, increase product quality and improve international competitiveness.

Globally, steel is a very secure industry. India, which is currently the world’s second largest steel producer, has recently increased its support for its sector. Bangladesh also protects its steel industry with up to 89.92 %. In comparison, Pakistan offers very little protection, which is between 43 and 57 percent. Moreover, while Bangladesh imposes only nominal sales tax on steel, which is Rs.

As a result, Bangladesh’s largest steel mill production capacity is 2.4 million tonnes, while Pakistan’s largest unit, which has a capacity of 1.1 million tonnes, is closed. He said that the government’s proposed reduction in prices threatened to promote the disparity. Local producers are also competing with the region’s highest power rates, even after the recent decline is 17 to 14 cents per kilowatt. On the contrary, the cost of electricity in China is only 7 cents. In combination with high rate interest and large -scale currency value, which is more than double the working capital requirements, these factors have severely eliminated competition. Industry leaders called on the government to first improve Pakistan’s global ease and business indicators before exposing the international competition. Pakistan is currently ranked 110th out of 140 countries. “Before opening our market for the world’s leading steel producers, we have to at least improve our ranking by 50,” he said.