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Illegal Steel Imports Draining Steel Industry

Pakistan, a resilient nation, is currently confronted with several challenges, including political instability. Furthermore, the fluctuation of the dollar has a significant impact on the Pakistani economy, making it very volatile. As widely acknowledged, the rise in the value of the dollar has had a huge negative impact on Pakistan's economic landscape. This rise in the value of the dollar has resulted in higher inflation rates, owing mostly to increasing import expenses. Pakistan, as a net importer of numerous goods, has seen the consequences of currency fluctuations, which have resulted in higher prices for basic commodities such as oil, food, and pharmaceuticals. Consequently, this has placed immense strain on the purchasing power of common citizens, making it increasingly challenging for them to meet their daily needs.

When it comes to negative repercussions, the country is also being affected by illegitimate activities. The steel sector, a crucial contributor to the economy, asserts that it suffers a deficit of Rs 25 billion in terms of tax revenue and foreign exchange reserves because of the continuous arrival of illegally imported steel bars from Afghanistan and Iran into Pakistan. According to the Pakistan Association of Large Steel Producers (PALSP), this illegal activity results in an estimated annual intake of approximately 500,000 metric tonnes of steel.

According to Waqas Ghani Kukaswadia, the Steel Sector Analyst at JS Global, the smuggling of steel bars has been an ongoing issue in the country. Nevertheless, the problem has intensified due to the misuse of quotas and exemptions in the Federally Administered Tribal Areas (FATA) and Provincially Administrative Tribal Areas (PATA), where these allowances have been taken advantage of.

“With billions of rupees of investments at stake, urgent action is needed from the government to save this crucial economic pillar otherwise irreparable damage will occur,” stated by Wajid Bukhari, Secretary General of PALSP.

Mr. Bukhari emphasized that the ongoing smuggling crisis is undermining both the principles of law and accountability. He stressed the necessity of implementing comprehensive measures, which encompass measures such as limiting steel imports to sea routes, strengthening digitalization and surveillance efforts imposing strict penalties for those involved in any complicity. Further, Bukhari stated “If immediate action is not taken, irreparable damage will occur to our industry.”



Aftab, O. (n.d.). Dollar Price Hike and its Effect on Pakistani Economy. (2023, September 1). Steel producers decry ‘unchecked smuggling’ DAWN.COM

Tribune. (2023, May 17). Smuggled steel infiltrating Pakistan. The Express Tribune.