Polyethylene, polypropylene: Tariff cuts must reflect in export growth: expert
ISLAMABAD: The government’s policy of reducing tariffs on imported raw materials needs to be reviewed against actual export performance, as available trade data suggest that substantial tariff concessions on polyethylene (PE) and polypropylene (PP) have led to a much larger increase in imports than in downstream exports. An expert, while analysing the impact of tariff liberalisation under the…
Islamabad: According to a government policy review, reduced tariffs on imported raw materials such as polyethylene (PE) and polypropylene (PP) have resulted in significantly higher imports than exports. An expert analyzed the impact of tariff liberalisation under the National Tariff Policy (NTP) and found that the policy aimed to improve competitiveness of downstream industries and boost exports, but the results have been mixed.
Customs duty on PE and PP tariff lines was reduced from 11% in FY 2021-22 to zero from FY 2025-26, leading to an estimated USD 83.6 million loss in customs-duty revenue. However, PE downstream exports only increased by USD 3.5 million and PP downstream exports by USD 26.1 million during the same period. Experts question whether tariff cuts are the right export-promotion tool and suggest a broader policy review to compare revenue forgone through tariff concessions with incremental exports generated.
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