Pakistan’s National Tariff Policy (NTP) represents a major attempt to reshape the country’s trade regime, reduce protectionist barriers and improve the competitiveness of domestic industry. Yet the controversy over the figures used to justify its direction has raised a question that goes beyond customs duties: how reliable is economic policymaking when the statistical foundations of a national reform programme are disputed? In a country struggling with weak industrial growth, mounting production costs and persistent export challenges, the answer matters to businesses, workers, consumers and policymakers alike.
The debate is not simply about whether Pakistan’s tariffs are too high or whether trade liberalisation is desirable. It concerns the credibility of the evidence used to diagnose the problem, compare Pakistan with competing economies and determine the pace of reform. When official statistics become the basis for decisions affecting investment, employment and domestic production, their accuracy and comparability must be beyond reasonable doubt.
According to media report published on October 15, 2026, industrialist Aamir Allawala challenged the tariff calculations cited in the National Tariff Policy, arguing that Pakistan’s average customs tariff in 2023 was 10.3 per cent rather than the 18.54 per cent figure used in the policy debate. His objection centred on the inclusion of additional customs duty (ACD) and regulatory duty (RD) in the higher figure, while allegedly inconsistent treatment of comparable charges in other countries made the regional comparison questionable.
The Ministry of Commerce has defended the calculation, maintaining that the 18.54 per cent figure represents a combined measure incorporating customs duty, additional customs duty and regulatory duty. Members of the policy’s drafting team have also argued that Pakistan’s tariff structure differs from those of neighbouring economies. These competing positions illustrate why the controversy cannot be settled merely by choosing the lower or higher number. It requires a transparent examination of the definitions, datasets and calculations behind both claims.
**Comparability, not merely arithmetic, is the real issue.**
Customs tariffs can be measured in different ways. A simple average of statutory duty rates is not necessarily equivalent to a trade-weighted average, which assigns greater importance to products according to their share of imports. Similarly, a basic customs tariff is different from the total burden created by additional customs duties, regulatory duties, exemptions and other import-related charges. Each measure answers a different economic question.
A meaningful international comparison must therefore specify precisely what is being measured. Are the figures statutory rates or duties actually collected? Do they include additional and regulatory charges? Are exemptions and preferential trade arrangements taken into account? Are the averages calculated using identical product classifications, reference years and weighting methods? Without clear answers, apparently precise percentages can conceal substantial differences in methodology.
This does not establish that the government’s calculation is wrong, nor does it prove that the alternative figure represents the complete cost of importing goods into Pakistan. It does establish the need for an independently verifiable comparison. A figure that accurately describes one aspect of a country’s tariff regime can still become misleading if it is presented as directly comparable with a differently constructed measure elsewhere.
The distinction has practical consequences. If Pakistan’s tariff protection has been overstated relative to competing economies, policymakers could underestimate the risks associated with rapid liberalisation. Conversely, if the effective burden on imports has been understated, the government could fail to recognise how duties raise costs for manufacturers that depend on imported machinery, components and raw materials. Both errors can lead to poor decisions.
The proposed reduction in import duties from 20.1 per cent to 9.7 per cent by 2030, as cited in the reported debate, makes the issue particularly significant. A reform of this magnitude could change the competitive landscape across manufacturing, agriculture, consumer goods and downstream industries. Its consequences will depend not only on the scale of reductions but also on the sectors affected, the sequence of implementation and the capacity of domestic producers to respond.
**Trade liberalisation must strengthen production, not simply increase imports.**
There are compelling arguments for reducing excessive tariff barriers. Expensive imported machinery can discourage technological modernisation, while duties on industrial inputs increase production costs and weaken the international competitiveness of locally manufactured goods. Lower tariffs may improve access to modern equipment, encourage efficiency, expand consumer choice and help exporters compete in foreign markets.
For an economy seeking to increase exports and attract productive investment, these benefits deserve serious consideration. Protection that persists indefinitely can shelter inefficient enterprises, discourage innovation and transfer costs to consumers and businesses that purchase domestically produced goods. An effective tariff regime should not become a permanent instrument for preserving uncompetitive production structures.
Nevertheless, the benefits of liberalisation are not automatic. Pakistani manufacturers operate within a wider economic environment shaped by electricity and gas prices, taxation, interest rates, exchange-rate movements, transport costs and access to finance. These factors influence production costs just as significantly as tariffs, and sometimes considerably more.
A domestic manufacturer facing expensive energy, costly credit and unreliable infrastructure may struggle to compete against imported products even after improving productivity. Lowering import duties without addressing these structural disadvantages could accelerate the displacement of local production rather than generate the intended expansion in industrial efficiency and exports.
The consequences could extend beyond individual businesses. Industrial closures can reduce employment, weaken supply chains and diminish the domestic value added that policymakers seek to increase. Small and medium-sized enterprises may be particularly vulnerable because they generally have fewer financial resources to absorb adjustment costs or invest rapidly in new technology.
The opposite approach, however, carries its own risks. Maintaining high duties to protect every existing producer can make essential inputs more expensive, discourage competition and perpetuate inefficiency. The objective should therefore be neither indiscriminate protection nor unconditional openness. It should be a predictable, evidence-based tariff structure that rewards productivity, supports export-oriented investment and enables domestic industry to adjust to international competition.
**Tariff reform needs an industrial strategy.**
Pakistan must connect trade liberalisation with a comprehensive programme for industrial development. Such a programme should identify sectors with realistic export potential, distinguish between imported inputs and competing finished goods, and assess the likely effects of tariff changes on employment, investment and domestic value addition.
The government should also consider the sequencing of reforms. Reductions in duties on machinery, technology and essential industrial inputs may offer immediate productivity benefits. Changes affecting sectors with limited capacity to adjust may require a more carefully designed transition, consistent with Pakistan’s international trade obligations. Any temporary protection should have transparent objectives, measurable performance requirements and a credible timetable for review.
Export competitiveness also requires reliable energy supplies, affordable financing, modern logistics, predictable taxation and access to international markets. Without these complementary measures, tariff reform risks becoming an exercise in changing import prices while leaving the deeper constraints on production untouched.
There is an additional fiscal dimension. Customs duties contribute to public revenue, while changes in import volumes and the composition of trade can influence collections. The government must assess the potential revenue implications of reform alongside its industrial and consumer benefits. A reduction in statutory rates does not automatically translate into an equivalent decline in revenue, just as increased imports do not guarantee a sufficient fiscal return. These outcomes depend on the structure of trade, compliance, exemptions and broader economic conditions.
**Transparency is essential to public confidence.**
The present controversy provides an opportunity to improve the institutional process through which Pakistan develops major economic policies. When a policy draws on technical analysis, international comparisons and government data, the assumptions behind its recommendations should be publicly accessible. Technical complexity must not become a reason to withhold the evidence on which consequential decisions depend.
The Ministry of Commerce and the National Tariff Commission should publish a detailed reconciliation of the disputed figures, explaining how customs duty, additional customs duty and regulatory duty have been treated. The relevant country-level datasets, calculation methods, reference periods and weighting procedures should be disclosed. Comparisons with regional economies should be recalculated using consistent definitions and clearly identified limitations.
The government should also commission an independent technical review involving trade economists, statisticians and representatives of relevant public institutions. Where international organisations have contributed data or technical assistance, their specific role in the analysis should be clearly documented. The objective should be verification rather than the assignment of blame.
Parliamentary scrutiny and structured consultation with manufacturers, exporters, small businesses, labour representatives and consumer organisations would further strengthen the process. Each group experiences tariff reform differently, and a credible policy must account for these competing interests without allowing any single stakeholder to dictate the outcome.
If the review identifies methodological inconsistencies, the government should correct the published figures and reassess any recommendations materially dependent on them. If the existing methodology proves sound, a transparent explanation would help resolve the disagreement. Neither outcome should be prejudged.
Ultimately, Pakistan’s economic future depends on more than the choice between protectionism and free trade. It depends on the quality of the institutions that make economic decisions, the evidence they use and their willingness to correct mistakes when necessary.
The National Tariff Policy may provide a useful framework for modernising Pakistan’s trade regime, but its credibility must rest on verifiable data and a realistic assessment of industrial conditions. Reform should be measured by whether it improves productivity, expands exports, attracts investment and creates sustainable employment—not simply by how quickly tariff rates decline.
Economic statistics are not technical footnotes to policymaking. They help define national priorities, justify public decisions and determine who bears the costs of reform. When the numbers underpinning a major policy are disputed, independent verification is not an obstacle to progress; it is a condition of responsible government. Pakistan needs a tariff policy that is both economically sound and publicly defensible, because sustainable liberalisation begins not with a target percentage, but with reliable evidence and a clear understanding of the country’s productive needs.
Mubashir Mir : The author is a Karachi based senior journalist. He writes on social , political and economic issues.