Government plans incentives, cheaper financing, industrial revival and EV-focused policies to strengthen Pakistan’s manufacturing sector.
The government is preparing a new Pakistan Industrial Policy aimed at accelerating industrialisation, reviving struggling factories, reducing the cost of doing business and improving access to affordable financing for the private sector.
Adviser to the Prime Minister and Federal Minister for Industries and Production Haroon Akhtar Khan said the government was working on policies covering battery energy storage systems, solar panels, mobile phone manufacturing, electric vehicles (EVs), agricultural machinery, fertiliser, automobiles, gems and jewellery and meat exports.
Speaking at the Lahore Chamber of Commerce and Industry (LCCI), he said the policies were designed to strengthen domestic manufacturing and reduce Pakistan’s reliance on imported products. A new Auto Policy is also nearing completion and is expected to offer incentives for electric two-, three- and four-wheel vehicles.
Industrial Units to Get Revival Support
Haroon Akhtar said the new Industrial Policy, approved by the Prime Minister, would facilitate the revival and restructuring of sick industrial units. Factories affected by high electricity costs, expensive borrowing or heavy taxation would receive opportunities to restart operations and become financially viable.
The policy would also seek to protect legitimate businesses from unnecessary administrative harassment while retaining enforcement powers against fraud and legal violations. Commercial courts, bankruptcy mechanisms and business restructuring systems are being developed to accelerate dispute resolution.
Cheaper Financing and Lower Costs
The minister said providing affordable private-sector financing was a major government priority. Banks should increase lending to businesses rather than concentrating excessively on government securities.
The government is also preparing private equity and venture capital policies while exploring longer-term financing options to reduce industries’ dependence on short-term bank borrowing.
He said the policy rate had fallen from a previous peak of 22% to around 11.5%, while efforts were underway to reduce electricity costs and improve Pakistan’s regional competitiveness.
Pakistan Steel Mills Land Lease Plan
Haroon Akhtar said 6,400 acres of Pakistan Steel Mills land had been converted to a lease-based model. Under the arrangement, investors would be able to obtain land for 30 years by paying an annual fee instead of making a large upfront payment, with an option for another 30-year renewal.
He also highlighted progress toward privatising electricity distribution companies, saying several investors had expressed interest.
SMEs and China Cooperation
The government is placing greater emphasis on small and medium-sized enterprises through an expanded role for SMEDA, support for women entrepreneurs, microfinance and improved access to bank financing.
The minister said around 600 Pakistan-China joint projects were under consideration, with about 32% moving toward implementation. Cooperation with China in pharmaceuticals is also increasing, including initiatives for local vaccine and insulin production.
LCCI President Faheem ur Rehman Saigol welcomed the proposed Industrial Policy but warned that expensive electricity, high borrowing costs and the tax burden were undermining industrial competitiveness.
He urged the government to ensure regionally competitive energy tariffs, improve tax-system efficiency and provide policy continuity to prevent further de-industrialisation.