ISLAMABAD: The government has presented Pakistan’s first-ever National Industrial Policy (NIP) to the federal cabinet for approval, detailing key constraints to industrial growth and proposing reforms aimed at revitalising the country’s manufacturing sector. However, the Ministry of Finance has asked the Ministry of Industries and Production to first obtain the International Monetary Fund’s (IMF) clearance for the proposed incentives before final approval.
According to officials, a meeting between IMF representatives and a team led by Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan is scheduled later this month to discuss the annual fiscal impact of the proposed measures. The policy sets ambitious targets — $60 billion in exports by 2030, 6 percent GDP growth, and 8 percent annual growth in manufacturing — as part of a roadmap to boost industrial competitiveness, job creation, and export expansion.
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The NIP identifies several structural and policy hurdles to growth, including macroeconomic instability, inconsistent regulation, high industrial land costs, unreliable energy supply, and limited access to long-term credit. It also points to uneven taxation, where manufacturing faces heavier taxes compared to sectors like real estate and wholesale trade, undermining industrial investment.
The policy stresses the need for a transparent and predictable taxation regime aligned with IMF-backed reforms. It proposes simplifying the corporate income tax (CIT) — currently 29 percent, above the regional average of 26 percent — and reviewing the super tax to ease the burden on industries. The NIP also calls for improving standards compliance, strengthening intellectual property rights, and expanding women’s participation in industrial entrepreneurship, noting that “women remain at the periphery and suffer from a sense of not belonging.”
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Structural reforms under the NIP include establishing a National Industrial Revival Commission (NIRC) to support struggling firms, improving investor protection, and cutting port charges levied by the Karachi Port Trust (KPT) and Port Qasim Authority (PQA) — among the highest globally — to enhance export competitiveness. Officials said the policy will provide a long-term framework for industrial transformation, but its implementation will hinge on IMF approval of the incentive package under the current economic stabilisation programme.