ISLAMABAD: The government of Pakistan is set to extend the regulatory duty on steel products for an additional three months, according to reliable sources. This decision comes in light of recommendations made by the Tariff Policy Board (TPB) to sustain support for the domestic steel industry.
Reports indicate that the regulatory duty of 5% and 10% on flat steel products, initially imposed under the Finance Act 2024, will now remain in effect until March 31, 2025. This measure, aimed at providing temporary protection to the local steel industry, was originally set to expire on December 31, 2024. The extension aligns with the framework of the National Tariff Policy 2019-24, which mandates that all tariff-related proposals must undergo thorough examination by the Tariff Policy Centre before being submitted for Cabinet or Parliamentary approval.
In response to industry appeals for continued regulatory support, the Tariff Policy Board convened its 61st meeting on December 26, 2024. Following deliberations, the Board recommended extending the regulatory duty on 36 tariff lines of flat steel products until March 31, 2025. It further specified that the existing regulatory duty rates of 5% and 10% would revert to their original levels of 0% and 5%, respectively, effective April 1, 2025.
The Ministry of Commerce, in a summary presented to the Economic Coordination Committee (ECC), highlighted the federal government’s authority under Sub-Section 3 of Section 18 of the Customs Act, 1969, to implement regulatory duties. The Ministry proposed the extension of regulatory duties on relevant iron and steel flat products as per the TPB’s recommendations.
Official documents reveal that International Steel Limited has requested a further extension of the regulatory duty on various finished flat steel products until June 30, 2025. Additionally, the company suggested imposing a 10% regulatory duty on Galvalume steel coils and sheets to curb circumvention of anti-dumping duties ranging from 5.36% to 40%. However, the TPB’s earlier recommendation in May 2024 capped regulatory duty changes to a sunset clause of December 31, 2024.
During the TPB’s discussions, the Joint Secretary (Tariff Policy) clarified that current tariff structures on flat steel products include customs duties (11%-20%), additional customs duties (2%-6%), regulatory duties (5%-10%), and anti-dumping duties (5.36%-40.47%). He noted that imports of flat steel products increased by only 4% in value during July-November 2024 compared to the previous fiscal year. Meanwhile, imports of Galvalume steel decreased by 13% in value and 8% in quantity, contradicting claims of a surge.
The Joint Secretary further cautioned that maintaining or increasing regulatory duties could negatively impact downstream industries. He also emphasized Pakistan’s commitment under the IMF program to avoid increasing trade-weighted average tariffs and to work towards their reduction during the program’s duration.