The Stagnant Middle in Pakistan’s Formal Salary Sector (2014–2024) Using employer-level administrative data from PRAL covering all corporations, state-owned enterprises, and government bodies, as well as partnership
The Trump administration published a new list of additional tariff rates in a document titled “Further Modifying the Reciprocal Tariff Rates” on July 31st 2025.
The US imposed new tariff rates on its trading partners on July 31st as the White House published the ‘Further Modifying the Reciprocal Tariff Rates’.
EAG Brief | Monetary Policy and Macroeconomic Management What If the Costs Become Untenable? Rethinking SBP’s Monetary Stance Muhammad Adil Mansoor, Economic Advisory Group
The purpose of the National Tariff Policy 2025-2030 was to not only reduce customs duties, eliminate regulatory duties and additional duties but also simplify the
The Economic Advisory Group published a series of data stories on the trade distorting effects of government intervetions through import tariffs in Pakistan between 2015
The tariff policy proposed in the National Tariff Policy 2025-2030 by the Ministry of Commerce promises an overhaul of the current import tariff structure in
The previous data stories in this series, “Enforcing the tariff wall via trade-distorting import measures: Comparison across measures” and Enforcing the tariff wall via trade-distorting
The previous data story, “Enforcing the tariff wall via trade-distorting import measures: Comparison across measures”, highlighted the complex web of trade policies imposed by policymakers
Continuing the discussion from the previous data story on import tariffs and custom duties as reported by Ahmed Jamal Pirzada, EAG Member, it is imperative
In Pakistan, protecting domestic industry from international competition goes far beyond the use of ordinary customs duties. Policymakers also rely heavily on additional customs duties
The share of remittances in GDP for Pakistan has increased from 1% in 2000 to 8% in 2023. As of 2019, this was one of
In Pakistan, protecting domestic industry from international competition goes far beyond the use of ordinary customs duties. Policymakers also rely heavily on additional customs duties (ACD) and regulatory duties (RD), which often layer protection on top of the standard rates. The chart shows how these duties vary across different industrial sectors, defined at HS 2-digit level. A few key patterns emerge.
First, the sectors that dominate Pakistan’s industrial base are also the ones most heavily protected. Interestingly, this also includes the high value-added textile segments (HS codes 61 to 64) where average tariff is around 35%.
Second, where protection is high, policymakers tend to deploy all available tools. Sectors with high customs duties also see higher levels of regulatory duties. The positive correlation between CD and RD—estimated at 0.42—suggests a coordinated use of multiple instruments to reinforce tariff barriers in the same sectors.
Third, the sectors with the lowest levels of protection are typically those that supply inputs to industry—such as chemicals, base metals, and raw materials used in high-end textile production.
Understanding how tariffs are structured across sectors is critical to any serious discussion around tariff reform. The government has recently announced a plan to bring down the (simple) average tariff rate from nearly 20% to below 10% over the next five years. But whether this plan succeeds will depend on more than just headline averages.
To be meaningful, tariff reductions must target the most heavily protected sectors, not just those that are already liberalised. Moreover, liberalisation must be accompanied by complementary reforms if the benefits of lower tariffs are to be realised.
Without addressing these deeper patterns of protection, any tariff reform risks being superficial, undermining the credibility of reforms in future.
The share of remittances in GDP for Pakistan has increased from 1% in 2000 to 8% in 2023. As of 2019, this was one of the highest for countries with a population higher than 30 million. The three countries which ranked higher were Philippines, Ukraine and Uzbekistan. The increased reliance on remittances mirrors the trend last seen between 1975 and 1985. While these inflows help sustain consumption, these can also be a source of Dutch disease.
Author: Dr. Ahmed Jamal Pirzada
The Economic Advisory Group is an independent platform of individuals drawn from economics, policy and the private sector. It was formed in January 2021, under the auspices of PRIME Institute, an independent think tank, which serves as its secretariat.
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