The Pakistan Association of Large Steel Producers (PALSP) has expressed concern about the widespread smuggling of steel from Iran and Afghanistan, which is having a detrimental impact on the domestic industry.
PALSP’s Secretary General, Syed Wajid I. Bukhari, Tuesday wrote a letter to Prime Minister Shehbaz Sharif, outlining the challenges faced by the industry due to factors such as smuggling and an unstable economy.
The industry is already struggling to survive due to currency depreciation, high financial costs, and increased input costs, and production has been affected by a shortage of raw materials. Many mills are operating at a fraction of their capacity.
The situation has been worsened by the rampant and organized scourge of smuggling, resulting in devastating consequences for the local steel industry and causing significant revenue losses for the national exchequer.
According to estimates, around 500,000 MT of steel is being smuggled annually from Iran and Afghanistan to Pakistan, which represents approximately 10% of the total steel produced in the country. The menace is also damaging the reputation of government agencies responsible for overseeing imports at border checkpoints.
The consequences of the smuggling problem extend beyond financial losses, as it could also implicate Pakistan in money laundering-related issues, potentially leading to sanctions from the FATF. Steel smuggling has already decimated the local steel industry in Quetta and other parts of Baluchistan, where over 80% of the steel sold is smuggled from Iran using various illicit tactics.
PALSP has been appealing to the relevant government departments to take concrete action against the illegal smuggling of steel, but no measures have been taken so far.
The association has previously suggested that steel imports should be allowed only through sea routes to effectively counter the threat posed by smuggling. PALSP’s letter to the Prime Minister is a desperate effort to urge the government to take decisive action to curb the rampant steel smuggling problem on a priority basis.
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