Karachi, May 1, 2025 — The Karachi Chamber of Commerce and Industry (KCCI) has submitted comprehensive recommendations to the government for the upcoming Budget 2025–26, addressing the growing issue of under-invoicing and misdeclaration on imported plastic, especially polyethylene and polypropylene products.
In its proposal, the KCCI pointed out that over the past three months, more than 50,000 metric tons of polyethylene have been smuggled or falsely imported under the guise of recycled plastic, causing significant losses to the national exchequer. These imports are routinely undervalued in Goods Declarations (GD), with recycled plastic falsely declared at just $450 per metric ton—far below the actual market price of $1,050 to $1,100 for prime materials.
One major issue highlighted by KCCI is the misreporting of container weights. Although a standard container holds 25 metric tons of plastic material, declarations frequently list only 17 metric tons, compounding revenue losses through under-invoicing and misdeclaration.
This unchecked activity is severely affecting legitimate importers, particularly those reliant on polymers as a core raw material. According to KCCI, Pakistan’s average annual plastic import was previously around 1.6 million metric tons, but this figure is expected to drop drastically to between 0.8 million and 1.0 million tons due to the uncompetitive pricing of smuggled imports from Iran.
In addition to the fiscal damage, the practice is also undermining foreign exchange reserves. The chamber warned that these undervalued plastic imports are being financed through grey market channels such as Hawala and Hundi, rather than official banking systems—leading to both revenue leakage and distortion of formal remittance flows.
To combat this, KCCI has proposed a firm valuation framework for all polyethylene and polypropylene imports (HS codes 3901 and 3902) originating from Iran. It recommends that Customs authorities assess these imports using the S&P Polymer Scan Report, a globally recognized pricing index already used at Karachi, Port Qasim, and various dry ports. Crucially, all imports from Iran should be treated as prime-grade plastic, regardless of the declared description.
The KCCI believes this approach will reduce under-invoicing, protect domestic industry, stabilize revenue, and curb illegal financial flows—ensuring that the country’s plastic sector returns to healthy, regulated growth.