The World Bank has identified high import tariffs and additional duties as significant barriers to industrial growth and export performance in Pakistan. In its latest report, the World Bank called for reduction in tariff slabs and the elimination of regulatory and additional customs duties. The global financial institution emphasized that current trade policies are hurting competitiveness and discouraging long-term industrial development.
According to the report, Pakistan’s import tariffs — including regulatory and additional customs duties — have risen by 117% over the past decade. This rise has led to reduced competition, promoted inefficient industrial strategies, and redirected investment away from productive sectors toward influential and protected groups.
The report also highlighted a troubling decline in exports as a share of GDP. In the 1990s, exports made up 15% of Pakistan’s GDP, but by 2024, this number had fallen to just 10% — the lowest in the South Asian region. This reflects a structural issue in the country’s trade and industrial policy.
To restore investor confidence and promote exports, the World Bank recommended several key reforms. These include a market-based foreign exchange system, access to affordable energy, easy financing, implementation of a National Regulatory Delivery Office, enforcement of the Investment Act, and reforms to bankruptcy laws.