RESTRICTED  
  
WT/TPR/S/424  
23 February 2022  
(22-1741) Page: 1/152 
Trade Policy Review Body   
 
TRADE POLICY REVIEW  
REPORT BY THE SECRETARIAT  
PAKISTAN  
This report, prepared for the fifth Trade Policy Review of Pakistan, has been drawn up by the WTO 
Secretariat on its own responsibility. The Secretariat has, as required by the Agreement establishing 
the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World 
Trade Organization), sought clarification from Pakistan on its trade policies and practices.  
 
Any technical questions arising from this repo rt may be addressed to Sergios Stamnas 
(022 739 5382) , Zheng Wang (022 739 5288) , and Usman Ali Khilji (022 739 6936).  
 
Document WT/TPR/G/424 contains the policy statement submitted by Pakistan.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the 
first session of the meeting of the Trade Policy Review Body on Pakistan. This report was drafted in 
English.  
  WT/TPR/S/424 • Pakistan  
 
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  CONTENTS  
SUMMARY  ................................ ................................ ................................ ........................  7 
1  ECONOMIC ENVIRONMENT  ................................ ................................ .........................  13 
1.1  Main Features of the Economy  ................................ ................................ .....................  13 
1.2  Recent Economic Developments  ................................ ................................ ...................  17 
1.2.1   Growth, income, and employment  ................................ ................................ .............  17 
1.2.2   Prices  ................................ ................................ ................................ .....................  20 
1.2.3   Main macroeconomic policy developments  ................................ ................................ .. 20 
1.2.4   Structural policies  ................................ ................................ ................................ .... 23 
1.2.5   Balance of payments  ................................ ................................ ................................  26 
1.3  Developments in Trade and Investment  ................................ ................................ ........  27 
1.3.1   Trends and patterns in merchandise and services trade  ................................ ................  27 
1.3.2   Trends and patterns in FDI  ................................ ................................ .......................  30 
2  TRADE AND INVESTMENT REGIMES  ................................ ................................ ...........  33 
2.1  General Framework  ................................ ................................ ................................ .... 33 
2.2  Trade Policy Formulation and Objectives  ................................ ................................ ........  34 
2.2.1  Trade policy formulation  ................................ ................................ ...........................  34 
2.2.2   Trade and related policy objectives  ................................ ................................ ............  35 
2.2.3   Trade laws and regulations  ................................ ................................ .......................  37 
2.2.4   Transparency  ................................ ................................ ................................ ..........  39 
2.3  Trade Agreements and Arrangements  ................................ ................................ ...........  41 
2.3.1   WTO ................................ ................................ ................................ ......................  41 
2.3.2   Regional trade agreements  ................................ ................................ .......................  43 
2.3.3   Preferential trade arrangements  ................................ ................................ ................  49 
2.4  Investment Regime  ................................ ................................ ................................ .... 50 
2.4.1   Policy and institutional framework  ................................ ................................ ..............  50 
2.4.2   Regulatory framework  ................................ ................................ ..............................  51 
2.4.3   Restricted activities  ................................ ................................ ................................ .. 51 
2.4.4  Registration and approval  ................................ ................................ .........................  52 
2.4.5   Investment promotion  ................................ ................................ ..............................  52 
2.4.6   Dispute settlement  ................................ ................................ ................................ ... 54 
2.4.7   Investment treaty developments  ................................ ................................ ...............  54 
3  TRADE POLICIES AND PRACTICES BY MEASURE  ................................ .........................  56 
3.1  Measures Directly Affecting Imports  ................................ ................................ ..............  57 
3.1.1   Customs procedures, valuation, and requirements  ................................ .......................  57 
3.1.2   Rules of origin  ................................ ................................ ................................ .........  58 
3.1.3   Tariffs ................................ ................................ ................................ ....................  59 
3.1.4   Other charges affecting imports  ................................ ................................ .................  65 
3.1.5   Import prohibitions, restrictions, and licensing  ................................ ............................  65 WT/TPR/S/424 • Pakistan  
 
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  3.1.6   Anti-dumping, countervailing, and safeguard measures  ................................ ................  66 
3.2  Measures Directly Affecting Exports  ................................ ................................ ..............  68 
3.2.1   Customs procedures and requirements  ................................ ................................ ....... 68 
3.2.2   Taxes, charges, and levies  ................................ ................................ ........................  69 
3.2.3   Export prohibitions, restrictions, and licensing  ................................ .............................  69 
3.2.4   Export support and promotion  ................................ ................................ ...................  71 
3.2.5   Export finance, insurance, and guarantees  ................................ ................................ .. 74 
3.3  Measures Affecting Production and Trade ................................ ................................ ....... 75 
3.3.1   Taxation and incentives  ................................ ................................ ............................  75 
3.3.2   Standards and other technical requirements  ................................ ...............................  78 
3.3.3   Sanitary and phytosanitary requirements  ................................ ................................ .... 80 
3.3.4   Marking, labelling, and packaging  ................................ ................................ ..............  81 
3.3.5   Competition policy and price controls  ................................ ................................ .........  82 
3.3.6   State trading, state -owned enterprises, and privatization  ................................ .............  83 
3.3.7   Government procurement  ................................ ................................ .........................  86 
3.3.8   Intellectual property rights  ................................ ................................ ........................  87 
4  TRADE POLICIES BY SECTOR  ................................ ................................ ......................  91 
4.1  Agriculture and Livestock ................................ ................................ .............................  91 
4.1.1   Main features and recent developments  ................................ ................................ ...... 91 
4.1.2   Policy, institutional, and regulatory developments  ................................ ........................  94 
4.1.3   Key subsectors  ................................ ................................ ................................ ........  98 
4.2  Fisheries ................................ ................................ ................................ ...................  104 
4.2.1   Main features and recent development  ................................ ................................ ...... 104 
4.2.2   Fisheries policies ................................ ................................ ................................ ..... 105 
4.3  Mining and Energy  ................................ ................................ ................................ ..... 106 
4.3.1   Mining and quarrying  ................................ ................................ ..............................  106 
4.3.2   Energy  ................................ ................................ ................................ ..................  107 
4.4  Manufacturing  ................................ ................................ ................................ ...........  112 
4.4.1   Main fe atures and recent developments  ................................ ................................ ..... 112 
4.4.2   Policy, institutional, and regulatory developments  ................................ .......................  113 
4.4.3   Key subsectors  ................................ ................................ ................................ ....... 116 
4.5  Services  ................................ ................................ ................................ ...................  118 
4.5.1   Recent developments  ................................ ................................ ..............................  118 
4.5.2   GATS and regional trade agreement (RTA) commitments  ................................ .............  118 
4.5.3   Financial services  ................................ ................................ ................................ .... 119 
4.5.4   Communications and postal services  ................................ ................................ .........  125 
4.5.5   Transport services  ................................ ................................ ................................ .. 130 
4.5.6   Tourism  ................................ ................................ ................................ .................  134 
4.5.7   Distribution services and e -commerce  ................................ ................................ ....... 134 
5  APPENDIX TABLES  ................................ ................................ ................................ ... 137 WT/TPR/S/424 • Pakistan  
 
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  CHARTS  
 
Chart 1.1 Product composition of merchandise trade by main HS section, 2014 and 2020  ..........  28 
Chart 1.2 Dire ction of merchandise trade, 2014 and 2020  ................................ ......................  29 
Chart 3.1 Distribution of MFN applied tariff rates, 2014/15 and 2021/22  ................................ .. 61 
Chart  3.2 Average applied MFN and bound tariff rates, by HS section, 2014/15 and  
2021/22  ................................ ................................ ................................ ..........................  62 
Chart 3.3 Tariff escalation by 2 -digit ISIC industry, 2014/15 and 2021/22  ...............................  63 
Chart 3.4 SOEs net profit/(loss), 2013/14 -2018/19  ................................ ...............................  84 
Chart 4.1 Wheat, 2015/16 -2020/21  ................................ ................................ ....................  99 
Chart 4.2 Rice, 2015/16 -2020/21  ................................ ................................ ......................  100 
Chart 4.3 Sugar cane, 2015/16 -2020/21  ................................ ................................ ............  101 
Chart 4.4 Cotton, 2015/16 -2020/21  ................................ ................................ ...................  102 
Chart 4.5 Trade in services, 2014/15 -2020/21 ................................ ................................ ..... 118 
Chart 4.6 Interest rate spread, Q1 2015 -Q2 2021  ................................ ................................  122 
Chart 4.7 Financial sector assets, 2020  ................................ ................................ ...............  123 
 
TABLES  
 
Table 1.1 Selected macroeconomic indicators, 2014/15 -2020/21  ................................ ............  14 
Table 1.2 Basic economic and social indicators, 2014/15 -2020/21  ................................ ...........  19 
Table 1.3 Balance of payments, 2014/15 -2020/21  ................................ ................................  26 
Table 1.4 Trade in services, 2014/15 -2020/21  ................................ ................................ ...... 29 
Table 1.5 Foreign direct investment inflows, 2014/15 -2020/21  ................................ ...............  30 
Table 1.6 Foreign direct investment outflows, 2014/15 -2020/21  ................................ .............  31 
Table 2.1 Main ministries and agencies responsible for trade -related issues, 2021  ....................  34 
Table 2.2 Main trade -related legislation, 2021  ................................ ................................ ...... 38 
Table 2.3 Pakistan's RTAs (notified and non -notified in force): main features, 2021  ..................  43 
Table 2.4 Basic investment incentives, 2022  ................................ ................................ ........  52 
Table 3.1 Prefer ential rules of origin in trade agreements, 2020  ................................ ..............  59 
Table 3.2 Tariff structure of Pakistan, 2014/15 and 2021/22  ................................ ..................  60 
Table 3.3 Summary analysis of the preferential tariff, 2020/21  ................................ ...............  64 
Table 3.4 Outstanding definitive anti -dumping duties, end -March 2021  ................................ .... 66 
Table 3.5 Anti -dumping actions, July 2014 to March 2021  ................................ ......................  67 
Table 3.6 Regulatory duty on exports, 2021  ................................ ................................ .........  69 
Table 3.7 Restricted exports  ................................ ................................ ...............................  70 
Table 3.8 Export processing zones, 2021  ................................ ................................ .............  72 
Table 3.9 Incentives, subsidies, and facilities  ................................ ................................ ........  73 
Table 3.10 Structure of federal tax revenue, 2014/15 -2020/21  ................................ ...............  75 
Table 3.11 Entities under privatization  ................................ ................................ .................  85 
Table 3.12 SOEs to be privatized  ................................ ................................ ........................  85 WT/TPR/S/424 • Pakistan  
 
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  Table 3.13 Potential privatization candidates  ................................ ................................ ........  86 
Table  3.14 Government procurement yearly contracts PKR 50 million and above, 
2015/16 -2020/21  ................................ ................................ ................................ .............  87 
Table 3.15 Overview of IPR legislation, 2021  ................................ ................................ ........  88 
Table 3.16 Applications and registrations of IPRs, 2014/15 -2018/19  ................................ ....... 88 
Table 4.1 Agriculture exports and imports, 2015 -20 ................................ ..............................  92 
Table 4.2 Agriculture sector growth rates, 2 014/15 -2020/21  ................................ ..................  93 
Table 4.3 Agriculture Transformation Plan  ................................ ................................ ............  94 
Table 4.4 Domestic agricultural support notified to the WTO, Marketing year 2015/16  ...............  97 
Table 4.5 Procurement/support prices of wheat, FY2015/16 –FY2020/21  ................................ .. 98 
Table 4.6 Ar ea and production of important crops, FY2015/16 –FY2020/21  ...............................  99 
Table 4.7 Wheat trade  ................................ ................................ ................................ ...... 100 
Table 4.8 Rice trade, 2015 -20 ................................ ................................ ...........................  100 
Table 4.9 Sugarcane and sugar trade, 2015 -20 ................................ ................................ ... 102 
Table 4.10 Cotton trade, 2013 -20 ................................ ................................ ......................  103 
Table 4.11 Major livestock trade, 2015 -20 ................................ ................................ ..........  103 
Table 4.12 Fisheries growth rates (base = FY2005/06), 2014/15 -2020/21  ..............................  105 
Table 4.13 Extractions of principal minerals, 2017/18 -March 2021  ................................ .........  106 
Table 4.14 Installed power generation capacity, 2017 -21 ................................ ......................  110 
Table 4.15 Electricity generation, 2019 -21 ................................ ................................ ..........  111 
Table 4.16 Production in the automotive sector, FY2014/15 -FY2020/21  ................................ .. 116 
Table 4.17 Taxes for imported vehicles (special regime), 2020/21  ................................ .........  117 
Table 4.18 Financial sector assets composition, 2016 -20................................ .......................  119 
Table  4.19 Financial soundness indicators of the banking sector, December  2016- 
December 2020  ................................ ................................ ................................ ...............  121 
Table 4.20  Basic indicators, 2015/16 –August 2021  ................................ ..............................  126 
Table 4.21 Air traffic data, 2014 -21 ................................ ................................ ....................  132 
 
BOXES  
 
Box 1.1 Pakistan's response to the COVID -19 challenge  ................................ .........................  16 
 
APPENDIX TABLES  
 
Table A1.1 Merchandise exports by HS section and major HS chapter/subheading, 2014 -20 ..... 137 
Table A1.2 Merchandise imports by HS section and major HS chapter/subheading, 2014 -20 ..... 138 
Table A1.3 Merchandise exports by destination, 2014 -20 ................................ ......................  139 
Table A1.4 Merchandi se imports by origin, 2014 -20 ................................ .............................  140 
 
Table A2.1 WTO notifications, August 2015 -August 2021  ................................ ......................  141 
Table A3.1 Tariff summary, 2020/21 (as at end -June 2021)  ................................ ..................  143 WT/TPR/S/424 • Pakistan  
 
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  Table A3.2 Prohibited imports, 2020  ................................ ................................ ...................  144 
Table A3.3 Restricted imports, 2020  ................................ ................................ ...................  145 
Table A3.4 List of items not importable in used/second -hand co ndition, 2015 -21 .....................  149 
Table A4.1 Pakistan's air services agreements, 2021  ................................ ............................  150 
 
 
  WT/TPR/S/424 • Pakistan  
 
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  SUMMARY  
1. Since Pakistan's previous Trade Policy Review in 2015, efforts for improving economic 
fundamentals and strengthening macroeconomic resilience have been undertaken. Pakistan was able 
to weather the COVID 19 pandemic comparatively well, supported by a proactive and comprehensive 
set of economic policies and other support measures. During the review period, Pakistan's annual 
GDP growth on a market price basis peaked at 5.8% (2017/18), and declined to -0.9% (2019/20), 
due to the COVID -19 outbreak. It has since bounced back to an estimated 4.7% in 2020/21 as a 
result of the timely adopted support measures. Pakistan's GDP annual average growth rate for the 
period 2014/15 -20/21 stood at 3.8%, a slight rise compared to previous performances (averaging 
3.2% in 2007/08 -13/14). Following an episode of external and fiscal imbalances, on 3 July 2019 
Pakistan entered a 39 -month IMF Extended Fund Facility (EFF) involving adjustment m easures, 
including fiscal consolidation; in light of the COVID -19 incidence, the EFF was temporarily put on 
hold in March 2020. Developments in Pakistan's competitiveness position in the world reflect those 
of labour productivity growth and, in particular,  total factor productivity growth, but also weaknesses 
in several areas where reforms have been under way. Inflation peaked at 10.7% in 2019/20 before 
slightly dropping to 8.9% in 2020/21, almost twice its 2014/15 level; the unemployment rate 
increased fro m 5.8% in 2017/18 to 6.9% (2018/19) and then seemingly rose further, reflecting 
concerns over a low GDP growth rate and the impact of the pandemic.  
2. During the review period, trade and trade related structural reforms focused on bolstering 
governance, effic iency, and the business climate; reforms, supported by the EFF, were undertaken 
in several areas including monetary, taxation, privatization, energy, competition policy, and 
corporate governance. In response to the COVID -19 pandemic, the State Bank of Paki stan has 
proactively loosened its prudent monetary policy under which the policy rate was changed 17 times 
between 15 May 2015 and 26 June 2020 from 6% to 13.25% (13 July 2019), a peak from which it 
was progressively cut to 7% on 26 June 2020 and then it w as raised to 7.25% on 21 September 
2021. To support the balance of payments, exchange restrictions and multiple currency practices 
were introduced in 2017 and 2018. Following a series of exchange rate adjustments since late 2017, 
on 16 May 2019 the system was changed from a de facto exchange rate arrangement (i.e. managed 
floating with no predetermined path for the exchange rate) to a market -determined exchange rate 
system that has supported external adjustment and reserve accumulation. During the review pe riod, 
the current account deficit peaked at 6.1% of GDP in 2017/18 due to a widened trade gap and then 
bottomed at 0.6% in 2020/21, averaging 2.9% of GDP during 2014/15 2020/21, same as in the 
period 2007/08 2013/14. Foreign exchange reserves bottomed at U SD 14.5 billion in 2018/19 and 
peaked at USD 24.4 billion in 2020/21 due to a significant improvement in the current account 
balance, the resumption of the IMF EFF, continued access to financing from other multilateral 
agencies and commercial and bilateral  creditors, the re issuance of Eurobonds, and the issuance of 
the country's first -ever green bond. Gross external debt grew considerably, by 78.4%, during the 
period 2014/15 -2020/21.  
3. Pakistan's openness to international trade and its integration into the w orld economy 
continued to be reflected by the country's share of trade (exports plus imports) in goods and services 
to GDP, which despite a slight rise from 27.7% in 2014/15 to 28.2% in 2020/21, continued its fall 
since the period 2007/08 -2013/14. Merchand ise trade has remained largely dependent on textiles 
and textile articles for exports, and mineral products and petroleum and machinery and electrical 
equipment for imports. International trade trends reflect the rising importance of Europe and the 
America s as Pakistan's main regional markets, and Asia and the Middle East as its main suppliers; 
furthermore, merchandise trade under most regional trade agreements (RTAs) remained negligible. 
Its main individual trading partners remain China, the European Union , the United States, and the 
United Arab Emirates.  
4. Pakistan maintains a relatively liberal investment regime, which applies equally to both 
nationals and foreigners. However, exceptions in certain sectors where there are equity limits on 
foreign investment  (i.e. agriculture, banking, construction, airline, and media) or where foreign 
investment is completely prohibited (i.e. arms and ammunitions, high explosives, radioactive 
substances, securities, currency and mint, and consumable alcohol) remain in place.  During the 
review period, Pakistan's ease of doing business rose significantly as a result of several reforms 
including the expansion of the procedures covered by an online one stop shop, and the easier 
payment system for value -added and corporate income taxes. Pakistan continued to promote 
investment, through the same tax and non -tax incentives consisting of reduced customs duties on 
imports of plant machinery and equipment; tax relief in the form of an initial depreciation allowance WT/TPR/S/424 • Pakistan  
 
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  on plant, machinery, and equipment; Special Economic Zones (SEZ) and Export -Oriented Units 
(EOUs) facilities, as well as sector -specific measures including Export Enhancement Packages (EEPs). 
During the review period, FDI inflows peaked in 2017/18 and bottomed the following ye ar; as at 
2020/21, they were largely allocated to services and energy, and mainly originated in China and the 
European Union. As from 2021, in line with policy considerations, the Bilateral Investment Treaties 
framework is being revised; similarly, followi ng Pakistan's signature in 2017 and implementation of 
two OECD tax treaties, changes are to be brought to its 66 Avoidance of Double Taxation Treaties.  
5. During the review period, Pakistan pursued wide -ranging trade -related and investment 
policies based on i ts Vision 2025; its overall trade policy objectives were embodied at its Strategic 
Trade Policy Framework (STPF) 2015 -18, and remain those of trade liberalization and facilitation, 
improvement of export competitiveness, and reduction of cost of doing busin ess. A first -ever 
National Tariff Policy (2019 -24) was introduced, inter alia, based on "time -bound" strategic 
protection and temporary import substitution principles to improve competitiveness, increase 
employment opportunities and consumer welfare, as we ll as to remove the anomalies in the tariff 
structure. Other approved policy initiatives included a National SME Policy Action Plan 2020 and a 
first E -Commerce Policy. A Pakistan Regulatory Modernization Initiative (PRMI), a project to reduce 
the complianc e burden of businesses while improving the effectiveness of the regulatory regime, 
was launched in June 2021. Statutory Regulatory Orders (SROs), a regulatory instrument of 
"delegated legislation" of concern in the past, remain in place but as from 2016 co ncessionary SROs 
providing exemption from duties and taxes have been issued only by the Federal Government rather 
than the Federal Board of Revenue; according to the authorities, SROs are now issued after approval 
of the competent authority and due process . 
6. Pakistan remains committed to the rules -based multilateral trading system and actively 
participates in WTO activities. During the review period, it expanded its WTO commitments by 
ratifying the Agreement on Trade Facilitation (TFA) and completing a large  part of its 
implementation. Pakistan signed the Joint Ministerial Statement on Investment Facilitation for 
Development and the Declaration on the Establishment of a WTO Informal Work Programme for 
Micro, Small and Medium Enterprises (MSMEs) at MC11. Pakis tan participates in several regional 
and preferential trade arrangements (RTAs/PTAs), of which many have had so far relatively limited 
product coverage and trade importance for the country. During the review period, although RTA 
concrete outcomes have been  limited to a Protocol on unilateral granting of "zero duty'' on 20 tariff 
lines to Pakistan under the Indonesia -Pakistan Preferential Trade Agreement (IP -PTA) in 2018 and 
the signature of a Protocol on Phase -II of the Pakistan -China RTA in 2019, several i nitiatives, 
intensified as from 2020, were taken to negotiate or explore the feasibility of future RTAs/PTAs with 
certain countries. Pakistan remains a beneficiary of the Generalized System of Preferences schemes 
of several countries. Furthermore, it conti nues to receive WTO trade -related assistance and Aid for 
Trade support. Pakistan continues to have some outstanding WTO notifications; at the same time, 
during the review period it was involved in six new dispute settlement cases (one as respondent, 
one as  complainant, and four as third party).  
7. The general thrust of Pakistan's trade policy has remained relatively unchanged since 2015. 
While no unilateral liberalization has been undertaken, there have been regulatory or institutional 
developments in certain areas, including trade facilitation, anti -dumping, incentive schemes, 
government procurement, and intellectual property rights.  
8. The tariff continues to be one of Pakistan's main trade policy instruments, and also a significant 
source of tax revenue. The 20 21/22 customs tariff remains complex, involving a multiplicity of rates 
(13 different ad valorem rates, and 20 different specific rates). The introduction of a zero rate that 
applies to nearly 30% of tariff lines, mainly industrial raw materials to help do mestic industry, 
coupled with the abolition of nuisance rates, has resulted in a reduction in the average applied MFN 
tariff rate from 14.3% in 2014/15 to 12.1% in 2021/22. Applied rates range from zero to 100% 
(levied on motor vehicles). Pakistan has boun d 97% of its tariff. The average bound rate is 61.5%, 
which is over five times the average applied MFN tariff, giving the authorities considerable scope to 
change the tariff. Regulatory duties on nearly 600 products ranging from 2% to 90% are in place. 
In addition, the tariff regime's complexity is increased by the prevalence of SROs providing for duty 
and tax exemptions and concessions. The National Tariff Policy 2019 -2024 has addressed some of 
these issues.  
9. During the review period, Pakistan made signific ant improvements to its customs clearance 
procedures enabling it to implement over 86% of the provisions of the WTO TFA and reducing WT/TPR/S/424 • Pakistan  
 
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  customs clearance times. These have included the roll -out of new modules in the WeBOC 
computerized clearance system, such a s those dealing with risk assessment, e -payments, advance 
ruling, pre -clearance, and the authorized economic operator programme. Additionally, Pakistan is 
also in the process of implementing a national single window platform.  
10. The import of certain products  is prohibited due to health, safety, security, moral, religious, 
and environmental reasons. Furthermore, Pakistan restricts the import of certain products for which 
prior approval or clearance, clearing testing arrangements, and compliance with certain pr ocedural 
requirements before importation is required. At the same time, Pakistan considers not having an 
import licensing regime. During the review period, changes were made in the trade contingency 
measures regime, with the enactment of the Anti -Dumping D uties Act, 2015. The Act aims to bring 
the methodology of the National Tariff Commission for Anti -Dumping investigations in harmony with 
the WTO Anti -Dumping Agreement and seeks to avoid litigation in domestic courts against its 
actions. During the period under review, Pakistan conducted 32 anti -dumping investigations; action 
was taken on 22 of these. Furthermore, over the same period, 10 anti -dumping actions were 
terminated. Pakistan undertook a countervailing investigation in 2016. However, no final measu res 
were imposed as anti -dumping measures had been imposed on the same product. Pakistan has 
never undertaken any safeguard measures.  
11. Pakistan continues to prohibit exports of certain products deemed essential so as to ensure 
adequate domestic supply; howe ver, this may possibly also assist downstream processing of these 
products. Additionally, some products can be exported only if certain conditions are met. The 
Government also levies an export development surcharge of 0.25% of the f.o.b. value on all expor ts 
to finance the Export Development Fund (EDF). Certain exports incur a regulatory duty ranging from 
15% to 25%, which essentially serves as an export tax, to also ensure domestic supply.  
12. Under the Strategic Trade Policy Framework for promoting high value -added exports, several 
schemes supporting such products continue to operate. These include Export Processing Zones 
Scheme (EPZ), Manufacturing Bond Scheme (MB), Duty and Tax Remission for Export Scheme 
(DRTE), Export -Oriented Units and Small and Medium En terprise Scheme (EOU), and the recently 
introduced Export Facilitation Scheme (EFS). Incentives offered under each scheme vary from tax 
and duty rebates to duty -free imports of inputs and plant and machinery to subsidized utility rates. 
Incentives under so me of these schemes, such as the EFS and funding under the EDF, are based on 
export performance. Additionally, preferential export finance schemes are also in place.  
13. Similar to the tariff, tax administration is hampered by the multiplicity of taxes, numero us 
concessions, and exemptions. With a view of developing an indigenous industrial sector as well as 
import substitution, Pakistan provides incentives that are both general in nature and sector specific. 
Sector -specific incentives are provided to the elect ric vehicle manufacturing, information technology, 
manufacturing of mobile devices, automobile, pharmaceutical, food processing, housing and 
construction, logistics, textiles, and tourism sectors.  
14. During the review period, the TBT regime remained unaltered . As of June 2021, nearly 73% 
of standards were internationally adopted, while those developed as Pakistan standards were also 
predominantly based on UK or regional standards. Pakistan has 114 mandatory standards.  
15. Under the latest Import Policy Order (2020 ), imports of live animals from territories with 
negligible BSE risk are now permitted, as are those of live poultry from countries that are not free 
from pathogenic avian influenza upon fulfilment of certain requirements.  
16. With a view to further improving food safety and applying international standards, the Pakistan 
Plant Quarantine Rules were updated in 2019. These provide details of goods permitted for import 
and associated conditions and requirements such a pest risk analysis and import risk analysis. T he 
Rules also provide an updated list of banned or restricted products from territories deemed high risk. 
Imports of GMOs and LMOs are permitted under specified conditions for research and 
experimentation purposes. Pakistan applies maximum residue levels/l imits (MRLs) to both domestic 
and imported foodstuff, and these are usually based on Codex standards and regulations.  
17. Pakistan considers not having state trading enterprises within the meaning of Article XVII:4(a) 
of the GATT 1994. State involvement in the  economy continues to be widespread with SOEs' 
revenues amounting to about 10% of nominal GDP. However, SOEs have been incurring considerable WT/TPR/S/424 • Pakistan  
 
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  losses and remain a significant burden on public finances and resource allocation. Consequently, the 
Government ha s been trying to privatize some of these entities, albeit with little success due mainly 
to lack of market appetite. To add momentum to the privatization process and also as part of the 
IMF EFF structural benchmarks, the Government undertook a comprehensiv e review of existing SOEs 
for the purpose of categorizing these for retention, privatization, and liquidation.  
18. During the review period, regulatory changes pertaining to government procurement in 
Pakistan, an observer to the plurilateral WTO Agreement on G overnment Procurement since 
February 2015, included direct contracting by SOEs and accommodating e -procurement methods, 
as well as expanding coverage to the disposal/sale of public assets. Price preferences of up to 25% 
continue to be in place depending on  domestic value -added content; the maximum preference is 
contingent on at least 35% domestic value -added. The magnitude of public procurement, coupled 
with the relatively high price preference, provides a significant advantage to domestic producers.  
19. Since 2015, there has been no change to the competition policy regime. However, it appears 
that the Competition Commission of Pakistan has become progressively more active in enforcement. 
In an effort to curb inflation and ensure the supply of essential commodit ies at affordable prices, the 
Government issued the Price Control and Prevention of Profiteering and Hoarding Order, 2021. Under 
the Order, the Government has the authority to fix and structure maximum prices for 50 goods 
deemed essential in the case of an  "uncontrolled price hike". Thus far, only sugar prices have been 
fixed under the Order, while those for wheat are under consideration.  
20. To encourage innovation and investment in the information technology sector, the 
Government took steps to further improv e and enforce the IPR regime. In May 2021, Pakistan signed 
and ratified the Protocol Relating to the Madrid Agreement Concerning the International Registration 
of Marks. In March 2020, Pakistan enacted the Geographical Indications (Registration and 
Protect ion) Act 2020 that establishes a Geographical Indications Registry and allows for a 
geographical indication of a foreign country to be registered in Pakistan. In 2016, the Plant Breeders 
Rights Act was enacted, and a Plant Breeders Rights Registry has been  set up under the provisions 
of the Act. During the review period, Pakistan took steps to improve enforcement, such as increasing 
the number of IPR Enforcement Coordination Committees, establishing three IP tribunals, and 
digitizing data at the trademark a nd copyright registries, which has seemingly led to increased 
seizures.  
21. Agriculture accounted for 25.7% of GDP in 2020/21, and 39.2% of total employment in 
2018/19, a signal of persisting low labour productivity compared to other activities. More than 60% 
of the population lives in rural areas, and the country continues to face high levels of food insecurity. 
The structure of Pakistan's agriculture is shifting, as the crop subsector's share in total agriculture 
value -added continues to decline, while the sh are of the livestock sector increases. The Government 
continues to use a wide range of policy tools, both at the border and domestically, to facilitate the 
development of the agriculture sector. The average applied MFN tariff on agriculture products in 
2021 stood at 13.2%, down from its 2014/15 level (14.6%), but still higher than for non -agricultural 
goods (11.9%). Tariffs peak at 90% (93.6% when ad valorem equivalents (AVEs) are included). 
Regulatory duties, SROs, import/export restrictions, input subsidi es, support prices, and tax 
deductions and exemptions all continue to be applied. SOEs have a significant involvement in 
agriculture. They include the Trading Corporation of Pakistan (TCP), which is involved in the 
importation of several essential food ite ms when the issue of national food security arises, and the 
Pakistan Agriculture Storage and Services Corporation (PASSCO), which maintains strategic reserves 
of wheat for food security.  
22. Pakistan is rich in marine resources and has a trade surplus in fish and crustaceans. The 
Government has been taking a number of initiatives to strengthen extension services, introduce new 
fishing methodologies, develop value -added products, enhance per capita consumption of fish, and 
upgrade socio -economic conditions of th e fishing community. To cover all aspects of sustainable 
fishing, the Government recently amended the Exclusive Fishery Zone (Regulation of Fishing) Rules, 
1990. MFN tariffs on fish and fishery products (WTO definition) averaged 13.9% in 2021, up from 
10.7% in 2013.  
23. During the review period, mining and quarrying contracted to just over 2% of GDP. Pakistan 
has a trade deficit in mineral products, and the average applied MFN tariff is 5.6%. One of the goals 
of the national mineral policy is to encourage small -scale mining, where preferences are given to 
Pakistani nationals. Pakistan relies on imported energy, particularly gas and oil. The Government WT/TPR/S/424 • Pakistan  
 
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  aims to phase out coal -fired power plants to protect the environment. SOEs play very important 
roles in the ener gy sector, and the Government sets electricity tariffs. The high cost of electricity, 
circular debt, underutilization of power plants, inefficient power generation companies, centralized 
control of distribution and generation companies, and high transmissi on and distribution losses 
persist. Electricity tariffs remain high, and cross subsidization continues. In 2019, more than one 
quarter of the population had no access to electricity.  
24. The manufacturing sector grew rapidly during the review period and contri buted around 12.5% 
of GDP in 2020/21. The Government formulated sector -specific policies to facilitate the development 
of this sector, such as the Automotive Development Policy 2016 -2021, the Mobile Device 
Manufacturing Policy 2020, and the Electric Vehicl e Policy 2020. Pakistan encourages the exportation 
of manufactured products by providing various incentives, including the removal of regulatory duties 
and additional customs duties, as well as a duty drawback scheme.  
25. Services' contribution to GDP rose con siderably during the review period. However, as the 
sector was most affected by the pandemic, its share of GDP dropped slightly (56.2%, 2020/21), 
albeit above its 2014/15 level. Pakistan remains a net importer of services. It made commitments 
beyond GATS i n the context of some of its RTAs.  
26. The financial services sector remained solvent and resilient in 2020 -21, although the non 
performing  loans to total loans ratio went up. The Central Bank has been making efforts to promote 
financial development and inclusion, by reducing the gender gap and advancing fintech and 
digitization of banking operations. As a large share of the population does n ot have a financial 
account, the Central Directorate of National Savings (CDNS) worked to increase people's access to 
affordable financial products and services by expanding digital access points. Interest rate spreads 
ranged from 2.85 percentage points to  6.13 percentage points during the review period, 
representing variations in banks' profit margins. Insurance penetration remains low (0.8% in 2020), 
but the subsector has been developing quickly. The State Life Insurance Corporation of Pakistan 
dominates the life insurance market, and the Pakistan Reinsurance Company Limited (PakRe) is the 
only reinsurer. The National Insurance Company has the exclusive authority to underwrite and insure 
public sector firms, assets, and properties. Capital markets have wit nessed several developments, 
including the promulgation of the Securities Act 2015 and the promulgation of the Futures Market 
Act 2016, as well as the merger of the three local stock exchanges to become a single unified 
Pakistan Stock Exchange (PSX) in 201 6. 
27. Growth momentum in the telecoms sector has continued, and the mobile subsector has been 
the main contributor. The Government issued a National Telecommunications Policy 2015, with a 
view to transforming Pakistan into an information society and a knowled ge-based, middle -income 
country by 2025. It also issued the Rolling Spectrum Strategy 2020 -2023; together with the annual 
spectrum strategies, the Government aims to allocate and assign spectrum to maximize social and 
economic benefits.  
28. The Government issu ed its National Transport Plan 2018, against a background of an 
unbalanced transport sector, a lack of coherent institutional framework, and legislation that was not 
up to date. The Pakistan Railways, the Pakistan National Shipping Corporation (PNSC), and Pakistan 
International Airlines (PIA) are the only, or the dominant, service providers in their respective 
markets. In 2019, a Shipping Policy was issued, with a view to incentivizing the private sector to 
participate in the mercantile shipping business. I n the same year, a National Aviation Policy was 
issued, aiming to improve the competitiveness of the industry and enhance regional air connectivity. 
The Government has also been making investments to promote the transport sector through the 
China Pakistan Economic Corridor (CPEC) programme and the Central Asia Regional Economic 
Cooperation (CAREC) programme. Cabotage in land, sea, and air transport is prohibited.  
29. Tourism was affected severely by the pandemic, security concerns, and a lack of planning and 
policy direction. The distribution services sector (wholesale and retail trade – 18.8% of GDP in 
2020/21) is recovering quickly. Notably, the Government launched its Digital Pakistan Policy in 2018, 
with a view to utilizing the country's young labour force a nd knowledge capital, which was followed 
by its E -Commerce Policy. E -commerce has been developing quickly in the past few years, as shown 
by the increase in the number of online vendors and local e -commerce platforms.  WT/TPR/S/424 • Pakistan  
 
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  30. Pakistan's short -term growth outlook r emains robust, mostly driven by private consumption, 
and is to reach its medium -term potential only by 2023/24. Despite efforts to strengthening 
macroeconomic resilience, substantive downside risks to the economic outlook remain and are 
subject to COVID -19 developments. Endogenous risks may stem from, inter alia, delays or failures 
in the implementation of critical structural reforms possibly leading to further fiscal and 
macroeconomic imbalances. Exogenous risks might relate to high uncertainty around the global 
recovery affecting the prospects for growth, exports and remittances, policy normalization in the 
advanced economies with implications for the cost of external financing, and the ongoing trend of 
surging global commodity prices. In addition to the o ngoing reforms, higher growth, investment, 
and job creation would depend on action for addressing long -standing structural weaknesses, 
including an uneven playing field for SOEs and private companies, that have remained a drag on 
productivity, investment, and the development of a vibrant private sector. These reforms would help 
Pakistan attain its economic and welfare policy objectives and further integrate into the world trading 
system.  
 WT/TPR/S/424 • Pakistan  
 
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  1  ECONOMIC ENVIRONMENT  
1.1  Main Features of the Economy  
1.1.  Pakistan, a WTO developing country Member with a population of 215.25 million (2020, world's 
5th largest), remains a lower middle -income economy as per the World Bank's classification; 
according to IMF estimates, in 2021 it was the 46th (43rd in 2015) and 26th largest economy in the 
world in terms of gross domestic product (GDP) and purchasing power parity (PPP), respectively.1 
Its relatively inward -oriented economy has been growing slowly over the past two decades, leading 
to a 2% annual per capita growth, less than half of the South Asia average, partly due to inconsistent 
macroeconomic policies an d an under -reliance on investment and exports to drive economic growth.2 
Small and medium -sized enterprises (SMEs) continue to play a considerable role in the economy.3 
Developments in Pakistan's competitiveness position in the world reflect those of lab our productivity 
growth (Section 1.2.1) and, in particular, total factor productivity growth – a key long -term 
determinant of international competitiveness and domestic living standards, but also weaknesses in 
several areas where reforms have been under wa y (Section 1.2.4).4 Prior to the COVID ‑19 outbreak, 
growth had picked up but the pandemic's shock jeopardized the momentum that the economy had 
gained on the back of strong policies and significantly reduced economic imbalances (Section 1.2.1).5 
Followin g one such episode of external and fiscal imbalances, on 3  July 2019 Pakistan entered a 
39-month IMF Extended Fund Facility (EFF) involving adjustment measures, including fiscal 
consolidation (Section 1.2.3.2), that contributed to a reduction of the imbala nces over the year and 
improved macroeconomic stability and the country was able to obtain access to external financing 
under the IMF's Rapid Financing Facility instrument; in light of the COVID -19 incidence in several 
areas, the authorities focused on mit igating its adverse socio -economic effects (Box 1.1) and part 
of the EFF programme was temporarily put on hold in March 2020 and was to resume after its 
combined 2nd and 5th Reviews in the first quarter of 2021.6 Upon experiencing negative growth in 
 
1 World Bank, Population, Total – Pakistan . Viewed at: 
https://data.worldbank.org/indicator/SP.POP.TOTL?locations=PK . 
2 In 2019, Pakistan ranked 93rd (98th in 2015) out of 133 economies on the Harvard Growth Lab's 
Economic Complexity Index, which measures the diversity of a country's economy. Reportedly, Pakistan's 
worsening complexity has occurred in spite of the increasing diversification of its exports, a s the country has 
diversified into lower complexity products. Nevertheless, Pakistan is positioned to take advantage of many 
opportunities to diversify its production using its existing know -how. Atlas of Economic Complexity, Pakistan . 
Viewed at: https://atlas.cid.harvard.edu/countries/168 , and Country & Product Complexity Rankings . Viewed 
at: https://atlas.cid.harvard.edu/rankings ; and World B ank, The World Bank in Pakistan . Viewed at: 
https://www.worldbank.org/en/country/pakistan/overview . 
3 As at 2021, there were over 5 million SMEs across the country contributing 35% to G DP and 
employing about 40% of the workforce with different skill sets. Government of Pakistan/Planning 
Commission/Ministry of Planning, Development and Special Initiatives (2021), Annual Plan 2021 -22: From 
Stabilization to Sustainable Growth , June. Viewed at: 
https://www.pc.gov.pk/uploads/annualplan/Annual_Plan_2021 -22.pdf . 
4 In 2019, Pakistan ranked 110th among 141 economies (126th out of 140 in 2015) in the WEF Global 
Competi tiveness Index, three notches below its 2018 position. It was well positioned in terms of market size 
(29th), business dynamism (52nd), and innovation capability (79th); however, indices related to the pillar of 
macroeconomic stability ranked much lower du e to marked deterioration in indices of inflation and debt 
dynamics as well as the infrastructure and ICT adoption. Reportedly, Pakistan is stuck in a development trap as 
the development of the key markets that regulate the allocation of productive factors  (markets for land, 
capital, and labour) has been stunted by elite capture; according to the World Bank, key priorities to escape 
from this trap are increasing competitiveness, and promoting equity and inclusion. World Bank Group (2020), 
Islamic Republic o f Pakistan – Leveling the Playing Field – Systematic Country Diagnostic , 16 September. 
Viewed at: https://openknowledge.worldbank.org/bitstream/handle/10986/34549/Pakistan -Systematic -
Country -Diagnostic -Leveling -the-Playing -Field.pdf?sequence=4&isAllowed=y ; World Economic Forum (2015), 
The Global Competitiveness Report 2015 -2016. Viewed at: http://www3.weforum.org/docs/gcr/2015 -
2016/Global_Competitiveness_Report_2015 -2016.pdf ; and World Economic Forum (2019), Global 
Competitiveness Report 2019 . Viewed a t: 
http://www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2019.pdf . 
5 IMF (2021), Pakistan: Second, Third, Fourth, and Fifth Reviews Under the Extended Arrangem ent 
Under the Extended Fund Facility and Request for Rephasing of Access – Press Release; Staff Report; Staff 
Supplement, and Statement by the Executive Director for Pakistan , IMF Country Report No.  21/73. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2021/04/08/Pakistan -Second -Third-Fourth -and-Fifth-Reviews -
Under -the-Extended -Arran gement -Under -the-50344 . 
6 The authorities continued to advance their reform agenda in key areas, including on consolidating 
central bank autonomy, reforming corporate taxation, bolstering management of state -owned enterprises, and 
improving cost recovery a nd regulation in the power sector (Section 1.2.4). IMF Country Report No.  21/73. 
Viewed at: https://www.imf.org/en/Publications/CR/Issues/2021/04/08/Pakistan -Second -Third-Fourth -and-WT/TPR/S/424 • Pakistan  
 
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  FY201 9/20, the year after economy revamped at its 2014/15 rate level (Table 1.1, Section 1.2.1). 
According to the latest available data, between 2015 and 2018, there were minor changes in income 
inequality and the poverty gap.7 The services sector remains the largest contributor to GDP, followed 
by agriculture, fisheries and forestry, and manufacturing (Section 1.2.1). Despite the lack of official 
figures, a relatively large portion of the economy is seemingly informal (Section 1.2.1), implying 
that GDP and GDP  per capita may be significantly underestimated, thereby possibly undermining 
the effectiveness of government policy and governance.8 
Table 1.1 Selected macroeconomic indicators, 2014/15 -2020/21  
  2014/15  2015/16  2016/17  2017/18  2018/19  2019/20  2020/21  
National accounts (% change, 
unless otherwise indicated)   
      
Real GDP (at 2005/06 market 
prices)  4.7  5.5  5.6  5.8  1.1  -0.9  4.7  
Real GDP (at 2005/06 basic 
prices)  4.1  4.6  5.2  5.5  2.1  -0.5  3.9  
Consumption  3.5  7.7  8.1  6.5  2.8  -2.8  6.9  
Private consumption  2.9  7.6  8.5  6.2  3.1  -4.1  7.4  
Government consumption  8.1  8.2  5.3  8.6  0.8  6.8  4.1  
Gross fixed capital formation  15.8  7.5  10.3  11.2  -12.5  -1.0  5.8  
Exports of goods and non -factor 
services  -5.6  -8.6  -0.9  17.8  23.7  8.5  13.6  
Imports of goods and non -
factor services  -0.4  0.4  83.4  -19.4  11.0  -6.0  20.1  
XGS/GDP (%) (at current 
market price)  10.6  9.1  8.3  9.0  10.1  10.0  9.9  
MGS/GDP (%) (at current 
market price)  17.1  16.2  17.6  20.1  20.3  17.4  18.2  
Unemployment rate (%)  5.9  .. .. 5.8   6.9   ..   ..  
Productivity (% change)   
Labour productivity   4.1   3.8   4.1  4.5   3.0   -1.3  ..  
Total factor productivity   4.1   3.0   2.0  2.2  2.0  -2.0   ..  
Prices and interest rates   
Inflation (CPI, % change)  4.5  2.9  4.8  4.7  6.8  10.7  8.9  
Lending rate (end -period, %)a 8.24  7.15  7.07  7.45  12.43  9.60  8.19  
Deposit rate (end -period, %)b 4.63  3.59  3.43  3.98  8.30  4.65  3.43  
Exchange rate         
PKR/USD (annual average)  101.3  104.2  104.7  109.8  136.1  158.0  160.0  
REER (end -period, % change)  8.2  0.3  3.1  -11.2  -15.4  2.3  7.3 
 
Fifth-Reviews -Under -the-Extended -Arrangement -Under -the-50344 ; and World Bank Group (2021), Pakistan – 
Macro Poverty Outlook , 17 June. Viewed at: 
https://documents1.worldbank.org/curated/en/304441623940931868/pdf/Pakistan -Macro -Poverty -
Outlook.pdf . 
7 As of 2018, Pakistan's income inequality indicator stood at 31.6 compared to 32.6 in 2015. The Gini 
coefficient is based on the comparison of cumulative proportions of the population against cumulative 
proportions of income they receive, and it ranges between 0 in the case of perfect equality and 100 in th e case 
of perfect inequality. As of 2018, its poverty gap at USD  3.20 a day rose slightly at 7.9 compared to 7.8 in 
2015. The poverty gap is the ratio by which the mean income of the poor falls below the poverty line. The 
poverty line is defined as half th e median household income of the total population. With COVID -19 lockdown 
measures having severely affected the off -farm sectors (providing livelihoods to the poorer and most 
vulnerable segments of the population) and in consideration of the overall slump in internal demand, poverty 
was expected to increase for the first time in the last two decades. In fact, poverty incidence was estimated to 
have increased in FY20 (July 2019 to June 2020) from 4.4% to 5.4%, using the international poverty line of 
USD 1.90 PPP 2011 per day, with more than two million people falling below this line. World Bank Group 
(2021), Pakistan – Macro Poverty Outlook , 17 June. Viewed at: 
https://documents1.worldbank.org/curated/en/304441623940931868/pdf/Pakistan -Macro -Poverty -
Outlook.pdf ; World Bank Group (2020), Islamic Republic of Pakistan – Leveling the Playing Field – Systematic 
Country Diagnostic , 16 September. View ed at: 
https://openknowledge.worldbank.org/bitstream/handle/10986/34549/Pakistan -Systematic -Country -
Diagnostic -Leveling -the-Playing -Field.pdf?sequence=4&isAllowed=y ; and World Bank, Gini Index (World Bank 
Estimate) – Pakistan . Viewed at: https://data.worldbank .org/indicator/SI.POV.GINI?locations=PK . 
8 According to two studies published in 2010 and 2018, the size of informal the economy in Pakistan is 
estimated to be around 25% -30% ( https://mpra.ub.uni -muenchen.de/28571/1/MPRA_paper_28571.pdf , 
https://mpra.ub.uni -muenchen.de/87087/1/MPRA_paper_87087.pdf ). Furthermore, the Pakistan Bureau of 
Statistics was about to complete a "re -basing of the economy" by December 2021; the inclusion of new sectors 
in the re -based national accounts that emerged after 2005 would reduce the size of informality. According to 
the data of a newspaper article that does not provide any i nformation on its methodology, definitions etc., the 
size of the informal economy could also be as much as 56% of GDP (2019) or around USD  180 billion a year. 
The size of the informal sector seems to be inversely linked to the quality of governance in the country. The 
authorities indicate that credible assertions of such nature should be based on authentic academic studies. 
Ejaz, L. (2021), "Informal Sector", Dawn , 4 March. Viewed at: https://www.dawn.com/ne ws/1610606 . WT/TPR/S/424 • Pakistan  
 
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    2014/15  2015/16  2016/17  2017/18  2018/19  2019/20  2020/21  
NEER  (end-period, % change)  4.7  0.7  1.9  -13.8  -19.8  -5.0  0.4  
Consolidated fiscal balance 
(% of GDP)         
Government revenue  14.4  15.4  15.5  15.2  13.0  15.1   14.5 
Tax revenue  11.0  12.6  12.4  12.9  11.7  11.4   11.1  
Custom duties  1.1  1.4  1.6  1.8  1.8  1.5   1.6  
Expenditure (incl. statistical 
discrepancies)  19.6  19.9  21.3  21.6  21.9  23.2   21.6 
Current  16.1  16.1  16.3  16.9  18.7  20.5   19.0  
Development and net lending  4.2  4.5  5.3  4.7  3.2  2.9   2.8 
Primary balance  -0.5  -0.2  -1.5  -2.1  -3.5  -1.8   1.4 
Overall fiscal balance  -5.2  -4.5  -5.8  -6.4  -9.0  -8.1   -7.1 
Total public debt (including 
obligation to the IMF)  63.3  67.7  67.1  72.1  85.9  87.6   83.5 
Domestic debt  44.4  46.9  46.5  47.4  54.4  56.0   55.1 
Saving and investment 
(% of GDP)         
Gross national savings  14.7 13.9 12.1 11.3 10.8 13.6 14.6 
Gross domestic investment  15.7 15.7 16.2 17.3 15.6 15.3 15.2 
Savings -investment gap  -1.0 -1.8 -4.0 -6.1 -4.8 -1.7 -0.6 
External sector (% of GDP, 
unless otherwise indicated)         
Current account balance  -1.0  -1.8  -4.0  -6.1  -4.8  -1.7  -0.6  
Net merchandise trade  -6.4  -6.9  -8.5  -9.8  -9.9  -8.0  -9.5  
Merchandise exports  8.9  7.9  7.2  7.9  8.7  8.6  8.6  
Merchandise imports  15.3  14.7  15.7  17.7  18.5  16.6  18.1  
Services balance  -1.1  -1.3  -1.5  -2.0  -1.8  -1.3  -0.7  
Capital account  0.1  0.1  0.1  0.1  0.1  0.1  0.1  
Financial account  -1.9  -2.5  -3.2  -4.3  -4.2  -3.5  -2.8  
Direct investment  -0.4  -0.9  -0.8  -0.9  -0.5  -1.0  -0.6  
Balance of payments  -1.0  -1.0  0.6  1.9  0.5  -2.0  -1.9  
Terms of trade (1990/91=100)  54.4  58.0  58.6  58.3  59.2  61.4   ..  
Merchandise exportsc (% change)  -3.9  -8.8  0.1  12.6  -2.1  -7.1  13.7  
Merchandise importsc (% change)  -0.7  -0.6  16.7  16.0  -6.8  -15.9  23.3  
Service exportsc (% change)  9.9  -7.1  8.4  -1.1  2.0  -8.9  8.9  
Service importsc (% change)  10.7  1.7  17.5  16.1  -10.9  -20.0  -11.4  
Foreign exchange reserves (USD 
billion, end -period)  18.7  23.1  21.4  16.4  14.5  18.9  24.4  
in months of imports of goods 
and services  4.5  5.5 4.4 2.9 2.8 4.3 4.8  
Gross external debt (USD billion; 
end-period)  65.2  73.9  83.5  95.2  106.3  113.0  122.2  
.. Not available.  
a Weighted average rates of return on advances.  
b Weighted average rates of return on deposits.  
c Growth rates are based on USD.  
Note:  Fiscal year = 1  July to 30  June.  
Source:  Pakistan Bureau of Statistics. Viewed at: https://www.pbs.gov.pk/ ; State Bank of Pakistan, 
Economic Data . Viewed at: https://www.sbp.org.pk/ecodata/index2.asp ; and data provided by the 
authorities.  
1.2.  Despite  Pakistan's efforts for strengthening macroeconomic resilience, substantive downside 
risks to the economic outlook remain and are subject to COVID -19 developments, including new 
waves of infections from vaccine -resistant strains, and any slowdown in mass v accinations.9 
Domestic/endogenous risks to the economy may stem from, inter alia, delays or failures in the 
implementation of critical structural reforms (EFF, Section 1.2.4) possibly leading to further fiscal 
and macroeconomic imbalances in areas such as  debt sustainability, external financing, and 
investment. Exogenous risks might relate to high uncertainty around the global recovery affecting 
the prospects for growth, exports and remittances, policy normalization in the advanced economies 
with implicati ons for the cost of external financing, and the ongoing trend of surging global 
commodity prices.  
 
9 IMF Country Report No.  21/73. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2021/04/08/Pakistan -Second -Third-Fourth -and-Fifth-Reviews -
Under -the-Extended -Arrangement -Under -the-50344 ; and World Bank Group (2021), Pakistan – Macro Poverty 
Outlook , 17 June. Viewed at: 
https://documents1.worldbank.org/curated/en/304441623940931868/pdf/Pakistan -Macro -Poverty -
Outlook.pdf . WT/TPR/S/424 • Pakistan  
 
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  Box 1.1 Pakistan's response to the COVID -19 challenge  
The health -related containment measures in response to the COVID -19 pandemic led to a collapse in economic 
activity in FY20 (2019/20), involving negative GDP growth, demand reduction, inputs shortage, job or income 
losses (i.e. revenue losses in agriculture 10% -15%, manufacturing 30% -50%, and services 50% -70% 
comp ared to previous years), poverty incidence increase, and food insecurity. To address the COVID -19 
challenges, a proactive and comprehensive set of support measures were taken in three areas (fiscal, 
monetary and macro -financial, and exchange rate and balan ce of payments) to minimize the economic impact 
and shore up growth.  
Fiscal support has been available from both federal and provincial governments. A fiscal relief package at the 
federal level worth PKR 1,200 billion (2.9% of GDP) was announced on 24  March 2020, of which PKR 
715 billion (1.7% of GDP) was executed in FY20.10 Key measures included the: (i)  elimination of import duties 
on emergency health equipment (extended until December 2020); (ii)  cash transfers to 6.2 million daily wage 
workers (PKR 75  billion); (iii)  cash transfers to more than 12  million low -income families (PKR 50 billion); 
(iv) accelerated tax refunds to exporters (PKR  100 billion); and (v)  support to SMEs and the agriculture sector 
(PKR 100 billion) in the form of power bill deferm ent and bank lending, as well as subsidies and tax incentives. 
The economic package also earmarked resources for an accelerated procurement of wheat (PKR 280 billion), 
financial support to utility stores (PKR 50 billion), a reduction in regulated fuel pric es (with a benefit for end 
consumers estimated at PKR 70 billion), support for health and food supplies (PKR  15 billion), electricity bill 
payments relief (PKR 110 billion), an emergency contingency fund (PKR 100 billion), and a transfer to the 
National Di saster Management Authority (NDMA) for the purchase of COVID -19-related equipment 
(PKR 25 billion). In addition, the FY21 (2020/21) budget includes further increases in health and social 
spending, tariff and custom duty reductions on food items, an allocat ion for the COVID -19 Responsive and 
Other Natural Calamities Control Program (PKR 70 billion), and a housing package to subsidize mortgages 
(PKR 30 billion), as well as the provision of tax incentives to the construction sector (retail and cement 
companies )) that was extended in the context of the second wave until end -December 2021. Fiscal measures 
available from provincial Governments included cash grants to low -income households, tax relief, and 
additional health spending (including a salary increase for  healthcare workers). The Government of Punjab 
implemented a PKR 18 billion tax relief package and a PKR 10 billion cash grants programme. The Government 
of Sindh's measures included a cash grant and ration distribution programme of PKR 1.5 billion for low -income 
households. In FY21, provincial budgets also provided tax relaxations and sizeable increases in expenditure 
allocations, especially on health services.  
Regarding monetary and macro -financial measures estimated at over PKR 2 trillion (approximatel y 5% of 
GDP), since 17  March  2020 the State Bank of Pakistan (SBP) has responded to the crisis by cutting the policy 
rate to 7% (Section 1.2.3.1). It has expanded the scope of existing refinancing facilities and introduced 
three  new ones to: (i)  support ho spitals and medical centres to purchase COVID -19-related equipment 
(50 hospitals, PKR 17.8 billion, ended on 30  June 2021); (ii)  stimulate investment in new manufacturing plants 
and machinery, as well as modernization and expansion of new and existing proj ects (628 projects, 
PKR 435.7  billion, until end -March 2020); and (iii)  incentivize businesses to avoid laying off their workers 
during the pandemic (2,958 firms, PKR 238.2 billion, ended in November 2020). These SBP temporary 
COVID -related refinance schem es and for fixed investments under Temporary Economic Refinance Facility 
were ended because of the sizeable pickup in economic activity from the second half of 2020 and the effective 
control of multiple waves of COVID -19 without imposing strict lockdowns. Moreover, the SBP introduced 
temporary regulatory measures to maintain banking system soundness and sustain economic activity. These 
include: (i)  reducing the capital conservation buffer by 100 basis points to 1.5% (in force); (ii)  increasing the 
regulator y limit on extension of credit to SMEs by 44% to PKR  180 million from PKR 120 million (in force); 
(iii) relaxing the debt burden ratio for consumer loans from 50% to 60% (expired); (iv)  allowing banks to 
defer clients' payment of principal on loan obligati ons by one year (expired); (v)  relaxing regulatory criteria 
for restructured/rescheduled loans for borrowers who require relief beyond the extension of principal 
repayment for one year (expired); and (vi) reducing margin call requirements of 30% vis-à-vis banks' 
financing against listed shares to 10% (expired) and banks are allowed to take exposure on borrowers against 
the shares of their group companies (in force). As of 14  April 2021, almost 1.9 million applications were 
received cumulatively for principa l deferral and loan restructuring schemes, of which around 97% of 
applications were approved, covering PKR 910.8 billion; the loan deferral scheme ended on 
30 September  2020, whereas the loan restructuring scheme ended on 31  March  2021. As part of the hous ing 
programme, the SBP has also introduced mandatory targets for banks to ensure loans to construction activities 
account for at least 5% of private sector portfolios by December 2021.  
In the area of exchange rate and balance of payments, the SBP introdu ced further regulatory measures to 
facilitate the import of COVID -19-related medical equipment and medicine. These include: (i)  lifting the limit 
on import advance payments and import on open account; and (ii)  allowing banks to approve an Electronic 
Import  Form (EIF) for the import of equipment donated by international donor agencies and foreign 
Governments. The SBP has also relaxed the condition of the 100% cash margin requirement on the import of 
certain raw materials to support the manufacturing and indu strial sectors (Section 1.2.3.1). As of 
October  2021, all of these measures were still in place.  
 
10 A fiscal year (FY) consists of the period 1  July-30 June. For example, FY20 covers the period 
1 July 2019-30 June 2020.  WT/TPR/S/424 • Pakistan  
 
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  In a bid to revive the economy, the Government relaxed some of the health -related containment restrictions 
and opted for a smart lockdown in June 2020. Conse quently, in FY21 the economy resumed its pre -COVID -19 
growth trajectory by rebounding in V -shape with, inter alia,  the highest large -scale manufacturing growth 
pace since 2005/06; highest export receipts since 2011; highest production of rice, maize, and wheat in a 
single year; and the highest ever workers' remittances (Section  1.2.1).  
Source:  IMF Country Report No.  21/73. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2021/04/08/Pakistan -Secon d-Third-Fourth -and-
Fifth-Reviews -Under -the-Extended -Arrangement -Under -the-50344 ; World Bank Group (2021), 
Pakistan – Macro Poverty Outlook , 17 June. Viewed at: 
https://documents1.worldbank.org/curated/en/304441623940931868/pdf/Pakistan -Macro -Poverty -
Outlook.pdf ; Government of Pakistan/Planning Commission/Ministry of Planning, Development and 
Special Initiatives (2021), Annual Plan 2021 -22 – From Stabilization to Sustainable Growth , June. 
Viewed at: https://www.pc.gov.pk/uploads/annualplan/Annual_Plan_2021 -22.pdf ; United Nations 
Industrial Development Organization  (undated), Impact Assessment of COVID -19 on Pakistan's 
Manufacturing Firms – Survey Results May -June 2020 (possibly). Viewed at: 
https: //www.unido.org/sites/default/files/files/2021 -
03/UNIDO%20COVID19%20Assessment_Pakistan_FINAL.pdf ; and State Bank of Pakistan (2020), 
Annual Report 2019 -20: The State of Pakistan's Economy . Viewed at: 
https://www.sbp.org.pk/reports/annual/arFY20/Complete.pdf . 
1.2  Recent Economic Developments  
1.2.1   Growth, income, and employment  
1.3.  During the review period, Pakistan's annual GDP growth on a market price basis peaked at 
5.8% (2017/18) to progressively decline to -0.9% (2019/20), the first negative growth outturn since 
FY 52 (1951/52) amid declining confidence and tighter financing conditions due to the COVID -19 
health -related containment measures, and revamped to an estimated 4.7% in 2020/21 as a result 
of the timely adopted support measures (Box 1.1); its annual average growth rate for the period 
2014/15 -2020/21 stood at 3.8%, a slight rise compared to the average of 3.2% in 2007/08 -2013/ 14 
(Table 1.1).11 According to the authorities, the 2017/18 peak was underpinned by supportive 
macroeconomic supply and demand policies, renewed confidence in the private sector, and fiscal 
discipline; furthermore, according to the World Bank, it was suppo rted by major infrastructure 
projects and low interest rates with major impetus coming from improved performance of the 
services and agriculture sectors.12 With the subsiding pandemic subsiding due to vaccine roll -out, 
expected improvement in the global ec onomy, anticipation of favourable weather conditions, 
vaccination drive to reach maximum population, and easing of COVID -19-related restrictions, 
managing current account deficit, consistent economic policies, and supportive monetary stance, 
the authoritie s estimate that GDP is to grow on a basic price basis at 4.8% in 2021/22 – a continuum 
of the 2020/21 growth stabilization trajectory.13 According to IMF and World Bank 2021 estimates, 
growth is to be mostly driven by private consumption contributions and to only reach its 
medium -term potential in FY24 (2023/24), due to the large shock and the need for continued fiscal 
adjustment, which is expected to offset some of impact of the stronger private sector growth on the 
overall economy.14 
1.4.  Since 2014/15, change s in the overall sectoral pattern of Pakistan's GDP and employment have 
mainly consisted of the increasing contribution of services – now accounting for 56.2% (2020/21) 
of economic activity on current prices (Table 1.2). According to the World Bank, Pakist an has 
 
11 WTO document WT/TPR/S/ 311/Rev.1, 2  June 2015; IMF Country Report No.  21/73. Viewed at: 
https://www.imf.org/en/P ublications/CR/Issues/2021/04/08/Pakistan -Second -Third-Fourth -and-Fifth-Reviews -
Under -the-Extended -Arrangement -Under -the-50344 ; and Finance Division (2021), Pakistan Economic Survey 
2020-21, Overview of the Economy, pp.  i-xxi. Viewed at: 
https://www.finance.gov.pk/survey/chapters_21/Overview.pdf . 
12 Finance Division (2018), Pakistan Economic Survey 2017 -18, Overview of the Economy, pp.  i-xvi. 
Viewed at: http://www.finance.gov.pk/survey/chapters_18/overview_2017 -18.pdf . 
13 Government of Pakistan/Planning Commission/Ministry of Planning, Development and Special 
Initiatives (2021), Annual Plan 2021 -22: From S tabilization to Sustainable Growth , June. Viewed at: 
https://www.pc.gov.pk/uploads/annualplan/Annual_Plan_2021 -22.pdf . 
14 IMF Country Report No.  21/73. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2021/04/08/Pakistan -Second -Third-Fourth -and-Fifth-Review s-
Under -the-Extended -Arrangement -Under -the-50344 ; and World Bank Group (2021), Pakistan – Macro Poverty 
Outlook , 17 June. Viewed at: 
https://documents1.worldbank.org/curated/en/304441623940931868/pdf/Pakistan -Macro -Poverty -
Outlook.pdf . WT/TPR/S/424 • Pakistan  
 
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  experienced a slow and "gendered" structural transformation as agriculture, which contributes 
25.7% (2020/21) of GDP employs 38.5% of total labour force – on a par with services with more 
than double contribution to GDP, and expansion of job opportu nities in the service and industry 
sectors has mostly benefited male workers; furthermore, it seems that barriers to women's 
socio-economic inclusion, limited human capital endowments, and constraints to private sector 
development have muted structural tra nsformation and labour productivity growth.15 Declining 
levels of private investment and low productivity growth have limited Pakistan's growth prospects. 
Long-term trends of macro indicators on productivity  – both total factor productivity (TFP) and labou r 
productivity – seem to show relatively low rates of growth when compared with other countries in 
the region.16 According to ILO estimates, in 2019 Pakistan's labour productivity (GDP constant 2011 
international USD in PPP) ranked 78th out 189 economies.17 Reportedly, annual productivity growth 
picked up from a pre -global financial crisis (2007 -09) average of 2.5% to 3.5% (2013 -18) when 
productivity growth benefited from strong foreign direct investment (FDI) inflows and infrastructure 
projects that suppor ted private sector activity.18 To enhance productivity and competitiveness of key 
sectors through support of the Government and the Asian Productivity Organization (APO), the 
National Productivity Organization (NPO) Pakistan has taken various strategic initiatives including 
the Develop ment of Productivity Master Plan of Pakistan (April 2020), the Public Sector Development 
Project Improving Competitiveness through Sustainable National Productivity (SNP) (June 2021), 
the Capacity Building Program for NPO Pakistan (March 2021), the Develop ing NPO as Certification 
Body for Productivity Specialist (March 2021), and Grant Fund for Business Recovery and Resilience 
of COVID -19-affected SMEs (September 2020). During the review period, both labour and total 
factor productivity growth registered an  overall slowdown from peak rates in 2017/18 and 2014/15, 
respectively, to negative rates in 2019/20 (Table 1.1) reflecting labour quality issues, shifts in the 
use of capital, and changes in technology for the former, and worsening problems of inefficienc y and 
capacity utilization for the latter. According to the SBP, in 2020, Pakistan remained among the 
economies that could not realize maximum benefits of integrating into global value chains (GVC) 
across different sectors; according to UNCTAD -Eora Global Value Chain Database estimates, in 2015 
Pakistan's overall composition of GVC participation (sum of backward and forward participation in 
global exports) ranked relatively low at the international level and stood at 33.2%, of which 27% 
were forward partici pation (share Pakistan's exports used as inputs in exports of other countries 
(e.g. primary agricultural commodities and low -tech manufacturing items)) and 5.6% backward 
participation (share of imported intermediate inputs the country is using in exports).19 
1.5.  During the review period, Pakistan's unemployment rate increased from 5.8% in 2017/18 to 
6.9% in 2018/19, and then seemingly rose further, keeping in view an expected low GDP growth 
rate and the negative effects of COVID -19 pandemic (Table 1.1).20 The p andemic adversely impacted 
livelihood of about 22% of workforce, as around 49% of the working population faced job loss or 
 
15 World Bank Group (2020), Islamic Republic of Pakistan – Leveling the Playing Field – Systematic 
Country Diagnostic , 16 September. Viewed at: 
https://openknowledge.worldbank.org/bitstream/handle/10986/34549/Pakistan -Systematic -Country -
Diagnostic -Leveling -the-Playing -Field.pdf?sequence=4&isAllowed=y . 
16 A 2020 study examining Pakistani firms listed in the stock exchange (publicly listed firms) over 
2012-17 found that: (i)  firm-level productivity was stagnant between 2015 -17, as suggested by m acro-data 
indicators; (ii)  in Pakistan, as in many other contexts, internationally linked firms performed better than 
domestic -owned or domestic -oriented firms; (iii)  protection at the upstream level, in the form of import duties 
on intermediate inputs or restrictions de jure  or de facto  that reduce penetration of FDI in upstream services 
sectors, reduced downstream productivity; and (iv)  integration with the global marketplace of upstream 
sectors – for both goods and services – has led to increased product ivity in downstream sectors. Lovo, S. and 
Varela, G. (2020), Internationally Linked Firms, Integration Reforms and Productivity: Evidence from Pakistan , 
World Bank Group Policy Research Working Paper 9349, August. Viewed at: 
https://openknowledge.worldbank.org/bitstream/handle/10986/34281/Internationally -Linked -Firms-
Integration -Reforms -and-Productivity -Evidence -from-Pakistan.pdf?sequence=1&isAllowed=y . 
17 ILO, Statistics on Labour Productivity . Viewed at: https://ilostat.ilo.org/topics/labour -productivity/ . 
18 World Bank Group (2020), Global Productivity: Trends, Drivers, and Policies , July. Viewed at: 
https://www.worldbank.org/en/research/publication/global -productivity . 
19 The value -added content of Pakistan's exports is predominantly concentrated in a single sector – 
textiles and wearing apparel – which repr esented 60% of domestic value addition in the country's exports in 
2015. State Bank of Pakistan, The State of Pakistan's Economy: First Quarterly Report for FY20 , pp. 85-100. 
Viewed at: https://www.sbp.org.pk/reports/quarterly/fy20/First/Special -Section -1.pdf. 
20 IMF Country Report No.  21/73. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2021/04/08/Pakistan -Second -Third-Fourth -and-Fifth-Reviews -
Under -the-Extended -Arrangement -Under -the-50344 . Haider, M. (2020), "Unemployment Rate to Surge to 
9.56p c in 2020 -21", The News , 5 June. Viewed at: https://www.thenews.com.pk/print/668245 -unemployment -
rate-to-surge -to-9-56pc-in-2020-21. WT/TPR/S/424 • Pakistan  
 
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  decline in income.21 According to the Pakistan Bureau of Statistics' Labour Force Survey 2018 -19, 
the informal sector continues to ac count for more than 7 of 10 (72.4%) of non -agricultural 
employment, more in rural (76.7%) than in urban areas (68.1%); the key sectors of employment 
in the informal economy are wholesale and retail trade (32.1%), manufacturing (20.9%), 
construction (17.4%) , community, social and personal services (15.5%), and transport (12%) 
(Section 1.1).22 
Table 1.2 Basic economic and social indicators, 2014/15 -2020/21  
 
2014/15  2015/16  2016/17  2017/18  2018/19  2019/20  2020/21  
Real GDP, basic prices 
(PKR billion, 2005 -06 prices)  10,631.6  11,116.8  11,696.9  12,344.3  12,600.7  12,541.8  13,036.4  
Real GDP, market prices 
(PKR billion, 2005 -06 prices)  11,140.1  11,755.8  12,408.8  13,133.0  13,283.3  13,159.1  13,777.4  
Current GDP, at market 
prices (PKR  billion)  27,443.0  29,075.6  31,922.3  34,616.3  38,086.2  41,556.3  47,709.3  
Current GDP, at market 
prices (USD billion)  270.9  278.9  304.9  315.1  279.9  263.0  298.1  
GDP per capita (USD)  1,426.9  1,441.1  1,545.7  1,568.2  1,367.5  1,262.4  1,406.8  
GDP by economic activity at constant 
2005/06 prices (%  change)        
Agriculture, forestry and 
fishing  2.1 0.2 2.2 4.0 0.6 3.3 2.8 
Crops  0.2 -5.3 1.2 4.7 -5.0 5.5 2.5 
Livestock  4.0 3.4 3.0 3.7 3.8 2.1 3.1 
Forestry  -12.4 14.3 -2.3 2.6 7.3 3.6 1.4 
Fishing  5.8 3.2 1.2 1.6 0.8 0.6 0.7 
Mining and quarrying  5.0 6.2 -0.6 7.8 1.2 -8.3 -6.5 
Manufacturing  3.9 3.7 5.8 5.4 -0.7 -7.4 8.7 
Electricity, gas and water 
supply  13.5 9.4 -2.7 -17.2 13.6 22.4 -23.0 
Construction  7.3 13.7 9.0 10.8 -15.5 5.5 8.3 
Services  4.4 5.7 6.5 6.3 3.8 -0.6 4.4 
Wholesale and retail trade  2.6 4.7 7.5 6.6 1.1 -3.9 8.4 
Transport, storage and 
communication  5.1 4.9 4.3 1.9 4.6 -3.8 -0.6 
Finance and insurance  6.3 6.4 11.1 7.4 4.5 1.1 7.8 
Housing services  4.0 4.0 4.0 4.0 4.0 4.0 4.0 
General government 
services  4.8 9.7 5.9 11.8 5.2 1.0 2.2 
Other private services  6.1 6.8 8.1 8.9 6.2 4.6 4.6 
Share of gross value -added, current 
prices (%)        
Agriculture, forestry and 
fishing  25.1 24.6 24.4 24.4 23.3 24.4 25.7 
Crops  10.3 9.6 9.4 9.2 8.0 9.4 10.3 
Livestock  13.8 14.0 13.9 14.3 14.3 14.0 14.4 
Forestry  0.5 0.6 0.6 0.6 0.6 0.6 0.5 
Fishing  0.3 0.4 0.5 0.5 0.4 0.5 0.4 
Mining and quarrying  2.7 2.4 2.2 2.3 2.8 2.8 2.2 
Manufacturing  13.5 12.8 12.8 13.0 13.2 12.1 12.5 
Electricity, gas and water 
supply  1.8 2.0 1.8 1.3 1.5 1.8 1.4 
Construction  2.1 2.2 2.3 2.4 2.1 2.0 2.0 
Services  54.9 56.0 56.6 56.4 57.2 56.9 56.2 
Wholesale and retail trade  19.3 18.6 19.3 19.2 19.2 18.3 18.8 
Transport, storage and 
communication  11.9 12.8 12.3 10.9 10.8 10.3 10.7 
Finance and insurance  2.3 2.0 2.0 2.1 2.5 2.8 2.0 
Housing services  5.3 5.5 5.6 5.7 5.7 5.8 5.5 
General government 
services  7.0 7.5 7.6 8.1 8.3 8.5 8.2 
Other private services  9.1 9.6 9.9 10.3 10.6 11.2 11.0 
Share of sector in total 
employment         
Agriculture, forestry and 
fishing  42.3 .. .. 38.5 39.2 .. .. 
Mining and quarrying  .. .. .. .. .. .. .. 
Manufacturing  15.3 .. .. 16.1 15.0 .. .. 
 
21 Government of Pak istan/Planning Commission/Ministry of Planning, Development and Special 
Initiatives (2021), Annual Plan 2021 -22: From Stabilization to Sustainable Growth , June. Viewed at: 
https://www.pc.gov.pk/uploads/annualplan/Annual_Plan_2021 -22.pdf  
22 Pakistan Bureau of Statistics. Viewed at:  https://www.pbs.gov.pk/content/labour -force-survey -2018-
19-annual-report . WT/TPR/S/424 • Pakistan  
 
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2014/15  2015/16  2016/17  2017/18  2018/19  2019/20  2020/21  
Electricity, gas and water 
supply  .. .. .. .. .. .. .. 
Construction  7.3 .. .. 7.6 8.0 .. .. 
Services  35.1 .. .. 37.8 37.8 .. .. 
.. Not available.  
Source:  Pakistan Bureau of Statistics. Viewed at: https://www.pbs.gov.pk/ ; and data provided by the 
authorities.  
1.2.2   Prices  
1.6.  During the review period, inflation peaked to 10.7% in 2019/20 before slightly dropping to 
8.9%, almost twice its 2014/15 level (Table 1.1), due to domestic demand especially after the 
COVID -19 outbreak, the steep fall in global crude prices, and an appreciating local currency coup led 
with easing food prices including through strategic imports of food items in short supply by the 
Government, and the Government's decision to postpone further upward adjustments in electricity 
tariffs (Section 1.2.4.4).23 According to SBP estimates, in  2021/22 average inflation is to moderate 
around 7% -9% on the basis of expected adjustments in energy tariffs and transmission of upward 
pressure of high global food commodity prices and intermediate goods.24 
1.2.3   Main macroeconomic policy developments  
1.2.3.1   Monetary  and exchange rate policy  
1.7.  Under the provisions of the State Bank of Pakistan (SBP) Act (last amended in 2015), the SBP 
remains responsible for conducting monetary and exchange rate policies, thereby securing monetary 
stability and fuller utilization of the  country's productive resources.25 The SBP gives more weight to 
target inflation (with broad money supply as an outcome) to meet real GDP and inflation targets, 
which are set by the Government. The authorities indicate that since January 2016 the pursuit of its 
monetary policy objectives h ave been carried out by a statutory independent Monetary Policy 
Committee; however, the pursuit of these objectives may be affected by the lack of the SBP's full 
autonomy.26 Proposed amendments to the SBP Act seeking to clearly define the objectives of the  
SBP, improve its functional and institutional autonomy to achieve its objectives, and strengthen its 
accountability in achieving its objectives were introduced in Parliament in March 2021 and remained 
under consideration in its relevant committee as of en d-October 2021.27 The proposed amendments 
are not only based on international best practices in central bank legislation but also take into 
account ground realities in Pakistan. The proposed SBP objectives consist of domestic price stability, 
financial sta bility, and support to the Government's economic policies to foster development and 
fuller utilization of resources.  
1.8.  During the review period, the SBP proactively loosened its prudent monetary policy in response 
to the COVID -19 shock. Between 25  May 2015 a nd 21  September  2021, the policy rate was changed 
17 times (7 cuts, 10 increases); the rate ranged from 5.75% to 13.25% (13  July 2019), a peak from 
which it was progressively cut as from 18  March  2020 within 4 months to 7% on 26  June 2020 in 
 
23 State Bank of Pakistan (2020), Annual Report 2019 -20: The State of Pakistan's Economy . Viewed at: 
https://www.sbp.org.pk/reports/annual/arFY20/Complete.pdf ; and IMF Co untry Report No.  21/73. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2021/04/ 08/Pakistan -Second -Third-Fourth -and-Fifth-Reviews -
Under -the-Extended -Arrangement -Under -the-50344 . 
24 State Bank of Pakistan (2021), Monetary Policy Statement July  27, 2021 . Viewed at: 
https://www.sbp.org.pk/m_policy/2021/MPS -Jul-2021-Eng.pdf ; and Government of Pakistan/Planning 
Commission/Ministry of Planning, Development and Special Initiatives (2021), Annual Plan 2021 -22: From 
Stabilization to Sustainable Growth , June. Viewed at: 
https://www.pc.gov.pk/uploads/annualplan/Annual_Plan_2021 -22.pdf . 
25 Monetary stability is defined as price stability and confidence in currency. WTO documen t 
WT/TPR/S/311/Rev.1, 2  June 2015; and Government of Pakistan, Finance Division, SBP Amendment Act 2021 . 
Viewed at: http://www.finance.gov.pk/SBP_Amendment_Act_2021.pdf . 
26 The Monetary Po licy Committee consists of 10 members: the SBP Governor (Chair), three  members of 
the Board, nominated by the SBP Board, three senior executives of the Bank, nominated by the Governor, and 
three External Members (economists) appointed by the Federal Govern ment on recommendation of the SBP 
Board. The Secretary of the Ministry of Finance remains an ex officio  member of the Board of Governors of the 
SBP. 
27 Government of Pakistan, Finance Division, SBP Amendment Act 2021 . Viewed at: 
http://www.finance.gov.pk/SBP_Amendment_Act_2021.pdf . WT/TPR/S/424 • Pakistan  
 
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  the wake of th e COVID -19 outbreak as from when it remained unchanged on the basis of the 
continued domestic recovery and improved inflation outlook, and then it was raised 21  September 
2021 to 7.25%.28 This historically unprecedented cut by a cumulative 625 bps was made  possible 
by a commensurate fall in inflation and monetary policy shifting towards supporting growth in the 
wake of the pandemic outbreak (Box 1.1).29 The SBP also expanded the existing refinancing facilities 
and introduced new ones, bringing its refinanci ng to commercial banks to a record level and 
supporting the recovery of credit (4.8% y -o-y in December 2020).30 According to the IMF, as at 
April 2021, the monetary stance was appropriate and supported the nascent recovery.31 Entrenching 
stable and low inf lation required a data -driven approach for future policy rate actions, further 
supported by strengthening the SBP's autonomy and governance.  
1.9.  To support the balance of payments at a time of heightened volatility, soaring imports, and a 
widening trade defici t (Section 1.2.5), according to the IMF the authorities introduced and maintain: 
(i) an exchange restriction and multiple currency practice (MCP) arising from the imposition of a 
100% cash margin requirement on imports of certain non -essential goods (since  2017); and (ii)  an 
exchange restriction resulting from the limitation on advance payments for imports against letters 
of credit (LCs) and advance payments up to the certain amount per invoice (without LCs) for the 
import of eligible items (since in 2018).32 Furthermore, to facilitate the online submission of foreign 
exchange (FX) related cases to the SBP in an efficient and cost -effective way, the central bank 
launched an online platform, i.e. the Regulatory Approval System (RAS), which became operational 
on 24  March 2020; its first implementation phase whereby paper -based case submission by banks 
was successfully completed on 28  August  2020, and its second phase, i.e. the development of banks' 
digital ports for receiving their customers cases/requests digi tally, was achieved on 
8 September  2021.  
1.10.   Following a series of exchange rate adjustments since late 2017, on 16  May 2019 the 
exchange rate system was changed from a de facto  exchange rate arrangement ( de jure  managed 
floating with no predetermined path) to  a market -determined exchange rate system, a pivotal move 
contributing to a better allocation of resources in the economy, helping to reduce accumulated 
external imbalances, providing a buffer against shocks, and supporting the rebuilding of international 
reserves (Section 1.2.5).33 The SBP does not publish information related to its intervention to 
 
28 State Bank of Pakistan, SBP's Reverse Repo, Repo, and Policy (Target) Rates . Viewed at: 
https://www.sbp.org.pk/ecodata/OVR -Repo-History.pdf ; and State Bank of Pakistan (2021), Monetary Policy 
Statement July  27, 2021 . Viewed at: https://www.sbp.org.pk/m_policy/2021/MPS -Jul-2021-Eng.pdf . 
29 State Bank of Pakistan (2020), Annual Report 2019 -20: The State of Pakistan's Economy . Viewed: 
https://www.sbp.org.pk/reports/annual/arFY20/Complete.pdf . 
30 IMF Countr y Report No.  21/73. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2021/04/08/P akistan -Second -Third-Fourth -and-Fifth-Reviews -
Under -the-Extended -Arrangement -Under -the-50344 . 
31 IMF Country Report No.  21/73. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2021/04/08/Pakistan -Second -Third-Fourth -and-Fifth-Reviews -
Under -the-Extended -Arrangement -Under -the-50344 . 
32 In 2017, the SBP imposed 100% cash margin requirements (CMR) on the import of 404  non-essential 
consumer items (later reduced to 402); it added another 131 items to this list in 2018, with seve ral changes 
and some exceptions permitted subsequently. However, in order to enable businesses to absorb the shocks of 
the COVID -19 pandemic, the SBP provided relief by removing CMR on 106 items in September  2020. On 
30 September  2021, the SBP imposed 100%  CMR on import of 114 items, taking the total number of items 
subject to cash margin to 525. Since 2015, advance payment of up to USD  10,000 or equivalent in other 
currencies per invoice has been permitted against intended imports of all eligible items wit hout requiring LCs or 
credit or bank guarantee, with certain conditions. In 2018, the SBP permitted open account remittances to 
manufacturing and industrial users for import of spare parts/raw materials only and advance payments up to 
USD 10,000 or equival ent per invoice for imports of specified items, e.g. essential medicines and medical 
devices, aircraft -related parts, laboratory equipment imported by education institutions for their own use, and 
newspapers, magazines, periodicals, and books. At the begin ning of 2019, it extended this facility to advance 
payments for imports of raw materials and spare parts by importers cum exporters, for their own use only. 
More specifically, this extension was for imports of up to USD  25,000 or equivalent in other curren cies per 
invoice without the requirement of LC, on behalf of manufacturing and industrial concerns and commercial 
importers, and up to 100% of the value of LC for imports on behalf of manufacturing concerns. Furthermore, 
the SBP extended general permission  for both advance payment and open account import of medical 
equipment for treatment of the COVID -19 pandemic in the first quarter of 2020. Economist Intelligence Unit 
(2020), Country Commerce – Pakistan , October; and IMF Country Report No.  21/73. Viewed a t: 
https://www.imf.org/en/Publications/CR/Issues/2021/04/08/Pakistan -Second -Third-Fourth -and-Fifth-Reviews -
Under -the-Extended -Arrangement -Under -the-50344 . 
33 According to the SBP Governor, the market -determined exchange rate system is not a free float and 
allows for the SBP to intervene to address disorderly market conditions. State Bank of Pak istan (2019), WT/TPR/S/424 • Pakistan  
 
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  support the Pakistan rupee  in the foreign exchange market. According to the IMF, the 
market -determined exchange rate has supported external adjustment and reser ve accumulation; 
this two -sided rupee flexibility served as an essential buffer to protect economic activity during 
heightened external volatility and opened monetary space to respond to the COVID -19 crisis. 
Furthermore, confidence in the rupee strengthene d, attracting considerable foreign participation in 
the domestic debt market.  
1.11.   During the review period, the nominal PKR/USD exchange rate depreciated with significant 
adjustments taking place from 2018/19 onwards (Table 1.1) to correct a large imbalance cr eated by 
a current account deficit rise to unsustainable levels and as a result of the adoption of the 
market -based exchange rate regime; in trade -weighted terms, as a result of similar adjustments, 
the effective exchange rate depreciated (except for 2017/ 18 and 2018/19), thus raising Pakistan's 
international competitiveness.  
1.2.3.2   Fiscal policy  
1.12.   Despite prudent fiscal policies and a strategy anchored on a gradual revenue -based fiscal 
consolidation, the fiscal deficit widened and peaked to 9% of GDP in 2018/19 owi ng to the decline 
in revenue collection (both tax and non -tax) and a significant rise in current expenditures, before a 
slight decrease to 8.1% of GDP in 2019/20 due to effective revenue mobilization and careful 
expenditure management (Table 1.1); fiscal d eficit declined further at 7.1% of GDP in 2020/21 as a 
recovery in domestic economic activity provided significant impetus to overall tax collection and 
effective expenditure management helped in containing the current expenditures to the lower side. 
Accor ding to the IMF, fiscal reforms started to improve budgetary discipline and broaden the tax 
base, mainly by eliminating concessions and exemptions and greater coordination with provinces.34 
However, COVID -19 affected fiscal consolidation causing an estimat ed loss of about PKR 1 trillion in 
tax revenue and heavy spending on fiscal stimulus measures (Box 1.1) as well as health and cash 
transfers to control the disease spread, alleviate unfavourable social outcomes, and minimize the 
short-term impact on growth .35 According to the World Bank, although fiscal consolidation efforts 
were to resume, the deficit was to remain elevated at 8.3% of GDP in FY21 (2020/21), partly due 
to the settlement of arrears in the power sector.36 Fiscal policy during 2021/22 envisage s containing 
the fiscal deficit, additional resource mobilization, rationalizing current spending, and switching from 
general to targeted subsidies while prioritizing development spending.37 Public debt, despite the 
COVID -19 shock, grew only by 2 percentage points of GDP over FY20 (2019/20), although it was 
elevated at 92.8% of GDP.38 The debt strategy would focus on a gradual shift towards long -term 
 
Distinguished Lecture Series: "Pakistan Economy: Macroeconomic Challenges and Outlook" , 1 October. Viewed 
at: https://www.sbp.org.pk/press/2019/Pr -01-Oct-19.pdf ; State Bank of Pakistan (2020), Annual Report 
2019-20: The State of Pakistan's Economy . Viewed at: 
https://www.sbp.org.pk/reports/annual/arFY20/Complete.pdf ; IMF (2017), Pakistan: S taff Report for the 2017 
Article  IV Consultation , IMF Country Report No.  17/212. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2017/07/13/Pakistan -2017-Article -IV-Consultation -Press -
Release -Staff-Report -Informational -Annex -and-45078 ; IMF (2019), IMF Country Report No.  19/212 Pakistan: 
Request for an Extended Arrangement under the E xtended Fund Facility – Press Release; Staff Report; and 
Statement by the Executive Director for Pakistan , IMF Country Report No.  19/212. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2019/07/08/Pakistan -Request -for-an-Extended -Arrangement -
Under -the-Extended -Fund-Facility -Press -Release -47092 ; IMF Country Report No.  21/73. Viewed  at: 
https://www.imf.org/en/Publications/CR/Issues/2021/04/08/Pakistan -Second -Third-Fourth-and-Fifth-Reviews -
Under -the-Extended -Arrangement -Under -the-50344 . 
34 IMF Country Report No.  21/73. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2021/04/08/Pakistan -Second -Third-Fourth -and-Fifth-Reviews -
Under -the-Extended -Arrangement -Under -the-50344 . 
35 State Bank of Pakistan (2020), Annual Report 2019 -2020 – The State of Pakistan's  Economy . Viewed 
at: https://www.sbp.org.pk/reports/annual/arFY20/Complete.pdf . 
36 World Bank Group (2021), Pakistan – Macro Poverty Outlook , 17 June. Viewed at: 
https://documents1.worldbank.org/curated/en/304441623940931868/pdf/Pakistan -Macro -Poverty -
Outlook.pdf . 
37 Government of Pakistan/Planning Commission/Ministry of  Planning, Development and Special 
Initiatives (2021), Annual Plan 2021 -22: From Stabilization to Sustainable Growth , June. Viewed at: 
https://www.pc.gov.pk/uploads/annualplan /Annual_Plan_2021 -22.pdf . 
38 IMF Country Report No.  21/73. Viewed at: 
https://www.imf.org/ en/Publications/CR/Issues/2021/04/08/Pakistan -Second -Third-Fourth -and-Fifth-Reviews -
Under -the-Extended -Arrangement -Under -the-50344 . WT/TPR/S/424 • Pakistan  
 
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  debt maturity profile, zero  borrowing from  SBP (refrained since the EFF -supported programme), 
accessing concessional external loans and discouraging foreign commercial borrowing.  
1.2.4   Structural policies  
1.13.   Trade and domestic reform are considered as intrinsically linked. During the review period, 
reform focus was placed on bolstering governance, efficiency, and the business climate (Section 2.4 
on investment) in several areas including taxation, privatization, energy, competition policy, and 
corporate governance. According to the IMF, higher growth, inves tment, and job creation would 
depend on action for addressing long -standing structural weaknesses such as an uneven playing 
field for state -owned enterprises (SOEs) and private companies, corruption, and red tape (especially 
excessive regulations and licen sing requirements, obstacles to paying taxes, and difficulties trading 
across borders and registering property) that have remained a drag on productivity, investment, 
and the development of a vibrant private sector (Sections 2.2.4, 2.4, and 3.3.5).39 
1.2.4.1   Tax r eform  
1.14.   The authorities' key fiscal objectives remain to broaden the tax base, reduce informality, and 
simplify and modernize the tax system.40 In this regard, they introduced a high -quality tax reform 
package in the FY22 (2021/22) budget, estimated at 0.7% of GDP, inter alia,  envisaging: 
(i) broadening of the general sales tax (GST) tax base and harmonization of the system between 
federal and pr ovincial governments; (ii)  simplifying the personal income tax (PIT) system, and 
increasing progressivity and support of labour formalization; (iii)  strengthening tax administration; 
(iv) reducing the capital gain tax from 15% to 12.5%; (iv) reducing the f ederal excise duty (FED) 
on telecommunications from 17% to 16%; (v) withdrawing the FED and reducing sales tax on locally 
manufactured cars up to 850  cc; (vi) reducing the sales tax rate on locally manufactured electric 
vehicles from 17% to 1%; (vii) exemp ting locally produced silos from tax; (viii)  instituting a special 
tax regime for SMEs; (ix) providing tax relief for women entrepreneurs; (x) bringing e -commerce 
transactions into the sales tax net; (xi) removing a series of withholding taxes (16 out of 
38 provisions); and (xii)  restoring the purity of the self -assessment scheme and implementation of 
the track -and-trace system (initially to 4  industries). Furthermore, as the pandemic has delayed the 
implementation of some policies and affected the pace of structural reforms, given the signs of 
economic recovery, as of April 2021 the authorities were keen to accelerate the pace of reforms and 
have adopted a comprehensive programme to substantially modernize the corporate income tax 
regime, as a first step of  a multi -year tax reform agenda, by drastically removing corporate tax 
exemptions.  
1.2.4.2   Privatization  
1.15.   According to the World Bank, direct state intervention in key sectors of the economy through 
SOEs and market regulation has continued to distort the allocation  of resources (Section 3.3.5).41 
The COVID -19 pandemic has stalled the privatization process – a condition of the paused EFF 
programme (Section 1.1), which the 2018 Government (Section 2.1) restarted after it was halted in 
2015.42 In 2018, the Cabinet Comm ittee on Privatization approved a new programme aimed at 
 
39 IMF Country Report No.  21/73. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2021/04/08/Pakistan -Second -Third-Fourth -and-Fifth-Reviews -
Under -the-Extended -Arrangement -Under -the-50344 . 
40 Federal Budget 2 021-22. Viewed at: http://www.na.gov.pk/uploads/1623423111_972.pdf ; and IMF 
Country Report No.  21/73. Viewed at: https://www.imf.org/en/Publications/CR/Issues/2021/04/08/Pakistan -
Second -Third-Fourth -and-Fifth-Reviews -Under -the-Extended -Arrangement -Under -the-50344 . 
41 The authorities indicate that many of the SOEs in Pakistan are operating on welfare goals that include 
ensuring electrification of poor households, operating in gas distribution as a natural monopoly, and ensuring 
distribution of essential food items to t he population. According to the World Bank, the Federal Government 
owns 206 SOEs with a combined output of 10.9% of GDP that employ fewer than half a million people 
(Section  3.3.5). They have a dominant position in several key sectors of the economy, inclu ding energy (from 
upstream oil and gas exploration activities to downstream transmission and distribution of power), insurance 
(State Life Insurance Corporation), and road construction and transport (Pakistan International Airways and 
Pakistan Railways are  near monopolies in their segments) (Sections 3.3.5, 4.2, and 4.4). World Bank Group 
(2020), Islamic Republic of Pakistan – Leveling the Playing Field – Systematic Country Diagnostic , 
16 September. Viewed at: https://openknowledge.worldbank.org/bitstream/handle/10986/34549/Pakistan -
Systematic -Country -Diagnostic -Leveling -the-Playing -Field.pdf?sequence=4&isAllowed=y . 
42 Privatization was also a condition of a three -year USD  6.6 billion bailout package approved by the IMF 
in 2013. The Government had agreed to sell off 10 SOEs by mid -2016 but missed this deadline as privatization WT/TPR/S/424 • Pakistan  
 
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  privatizing 49 enterprises in 2 phases: an active list of 8 entities to be privatized by June 2020; and 
41 entities to be privatized in a second phase by June 2024. The programme has been reviewed 
from time to time. As of June 2021, the Active Privatization programme covered 15 SOEs (steel, 
energy, banking, insurance, engineering, tourism, and business services) subject to strategic 
sale (9), sale of assets (2), and divestment of government -owned shar es through capital market (3) 
or revival (1); indicative privatization timelines were set for 11 of them and ranged from July 2021 
to June  2022. As of October 2021, the privatization process for 21  enterprises in energy, industry, 
financial, and real estat e (sale of properties owned/controlled by the Federal Government) sectors 
was under  way. The Government remains keen to improve the financial health of SOEs in preparation 
for selling them and has set up a holding company to better manage some of these ent erprises; it 
published audits of key SOEs, i.e. Pakistan International Airlines and Pakistan Steel Mills in 
January  and July 2020, respectively.43 Furthermore, a new SOE bill was submitted to Parliament and 
a triage of all SOEs was published in March 2021.  
1.2.4.3   Energy sector  
1.16.   Uninterrupted, equitably accessible, and affordable energy plays an important  role in 
supporting the growth structure of an economy.44 Pakistan remains confronted with multiple 
problems of losses, poor recoveries, cross -subsidization, high t ariffs, and rising circular debt.45 
During the review period, the Parliament passed two amendments to the Regulation of Generation, 
Transmission and Distribution of Electric Power Act (National Electric Power Regulatory Authorit y 
(NEPRA) Act) (April 2018, August 2021) to, inter alia, open up the power market to private sector 
participation, and the Cabinet approved a circular debt management plan (March 2021).46 There are 
two amendments to the NEPRA Act. The authorities adjusted electricity prices and compl eted the 
first of the three phases to convert indirect energy subsidies to direct subsidies (Section 4.2.2.2). 
The circular debt management plan and the enactment of the NEPRA Act amendments would help 
restore financial viability through management improve ments, cost reductions, regular tariff 
adjustments, and better targeting of subsidies. The circular debt management plan was being 
updated in light of the Sixth IMF EFF review held in October 2021.  
1.2.4.4   Competition policy and corporate governance  
1.17.   During the rev iew period, in addition to its regular enforcement action, as from 
September  2016, the Competition Commission of Pakistan (CCP) has initiated a comprehensive plan 
to revamp its existing guidelines on substantive and procedural aspects of the competition la w and 
the working of CCP (Section 3.3.4) including amendments to the General Enforcement Regulations, 
2007, and the Leniency Regulations.47 Furthermore, the recent increase in data -driven mergers and 
 
seemed to fa ll off its list of priorities once the funding programme ended that year. Factors contributing to the 
stalling of the privatization drive included labour protests, delays, and the legislative election in 2018. 
Economist Intelligence Unit (2020), Country Co mmerce – Pakistan , October.   
43 IMF Country Report No.  21/73. Viewed at: 
https://www.imf. org/en/Publications/CR/Issues/2021/04/08/Pakistan -Second -Third-Fourth -and-Fifth-Reviews -
Under -the-Extended -Arrangement -Under -the-50344 . 
44 Fatima, T., Hassan, S., and Ghias, W. (2018), "The Role of Energy Sector in Economic Development 
of Pakistan in the Co ntext of Sustainability and Resilience: A Reality Check", NDU Journal , Vol. 12, No. XXXII. 
Viewed at: https://ndujournal.ndu.edu.pk/site/issue/view/17/12 . 
45 Federal Budget 2021 -22. Viewed at: http://www.na.gov.pk/uploads/1623423111_972.pdf . 
46 IMF Country Report No.  21/73. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2021/04/08/Pakistan -Second -Third-Fourth -and-Fifth-Reviews -
Under -the-Extended -Arrangement -Under -the-50344 . 
47 This work included the Competit ion (Merger Control) Regulations, 2016 (amended); the Competition 
Commission (Duties and Responsibilities of Registrar) Regulations, 2016; the Competition Commission 
(Exemption) Regulations, 2020; the Amendments in Competition Commission (Service) Regulati ons, 2007 
(18 January 2019); the Amendments in Competition Commission (Service) Regulations, 2007 (2  May 2016, 
20 September 2016); the Guidelines regarding "Exemption" (Details); the Guidelines regarding "Section 4 – 
Prohibited Agreements" (Details); and t he Guidelines regarding "Section 3 – Abuse of Dominant Position" 
(Details). Competition Commission of Pakistan, Press Releases . Viewed at: 
https://www .cc.gov.pk/index.php?option=com_content&view=article&id=485&Itemid=137&lang=en ; 
Regulations . Viewed at: 
https://www.cc.gov.pk/index.php?option=com_cont ent&view=article&id=17&Itemid=120&lang=en ; 
Notifications . Viewed at: 
https://www.cc.gov.pk/index.php?option=com_content&view=article&id=61&Itemid=118&l ang=en ; and 
Guidelines . Viewed at: 
https://www.cc.gov.pk/index.php?option=com_content&view=article&id=20&Itemid=122&lang=en . WT/TPR/S/424 • Pakistan  
 
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  acquisitions in digital markets has led to renewed inter est in the mandates of different regulators 
with regard to such markets.48 
1.18.   Good corporate governance contributes to sustainable economic development by enhancing 
the performance of companies and increasing their access to outside capital.49 During the revi ew 
period, major developments in this area have been the enactment of the Companies Act, 2017 on 
30 May 2017, and the issue by the Securities and Exchange Commission of Pakistan (SECP) of the 
Listed Companies (Code of Corporate Governance) Regulations, 201 9 (2019 Code) superseding the 
2017 Code on 25  September  2019.50 According to the SECP, the Act would facilitate growth in 
general and the corporate sector in particular by providing simplified procedures for ease of starting 
and doing business, and greater  protection of investors. It would give a boost to corporatization in 
the country, and provide a simpler and softer regime for small companies, enable e -governance, 
augment standards of transparency and quality of information, and ensure better corporate 
governance. The 2019 Code is now based on a "comply or explain" approach, a new governance 
regime in Pakistan as previously the specific provisions were mandatorily required to be implemented 
with any exception reported as a "non -compliance". The 2019 Code requires the responsibility of 
boards of directors of listed companies to use "comply or explain" principle wisely and of investors 
to assess differing company approaches thoughtfully. Both the 2017 Act and the 2019 Code require 
boards of directors to have  at least one female director when it is reconstituted after the expiry of 
its current (2019) term.  
1.2.4.5   Labour market policies  
1.19.   During the review period, some of the policies in this area were updated. The Federal 
Government raised the monthly minimum wage from  PKR 15,000 to PKR  17,500 in July 2019; in 
June 2021 it was increased to PKR 20,000.51 All four provincial Governments have adopted this 
adjustment, but minimum wage provisions remain poorly enforced.52 The Annual Plan 2021 -22 
focused on increasing the lab our force participation rate, especially for women, job creation, and 
promoting decent work.53 Accordingly, 25% of the funds under the Prime Minister's Kamyab  SME 
lending programme (Section 3.3.1) are earmarked for female entrepreneurs. Furthermore, an 
economic stimulus package would be introduced to aid SMEs for greater value addition and to 
support job creation (Section 1.1). Provision of employment to youth is a high priority in the present 
Government's agenda; under the Skills for All (Hunarmand Pakistan Program) under the Kamyab 
Jawan Initiative, on 1  July 2019 a PKR 9.88 billion programme was launched for skill development 
of youth and uplift of the techni cal and vocational education and training sector.  
 
48 UNCTAD (2021), Competiti on Law, Policy and Regulation in the Digital Era , document 
TD/B/C.I/CLP/57, 28  April. Viewed at: https://unctad.org/system/files/official -document/ciclpd57_en.pdf . 
49 World Bank Group (2015), World Bank Group A to Z 2016: Corporate Governance . Viewed at: 
http://elibrary.worldbank.org/doi/full/10.1596/978 -1-4648-0484-7_corporate_governance . 
50 Securities & Exchange Commission of Pakistan (2017), "President Signs Companies Act, 2017, into 
Law", 30  May. Viewed at: https://www.secp.gov.pk/wp -content/uploads/2017/05/President -signs-Companies -
Act-2017-into-law.pdf ; Crowe (2020), Companies Act 2017, Significant Amendments, May 2020 . Viewed at: 
https://www.crowe.com/pk/ -/media/Crowe/Firms/Asia -Pacific/pk/CroweHorwathPK/1Updates/Companie s-Act-
2017--Significant -Amendments -May-2020.pdf?la=en -
GB&modified=20200627142942&hash=574BDC760EA5D9C2B2126D938FAA370014E28DF9 ; KPMG (2017), A 
Brief on the Companies Act, 2017 . Viewed at: 
https://home.kpmg/content/dam/kpmg/pk/pdf/2018/02/A%20brief%20on%20the%20Companies%20Act%2C
%202017%20 -%20updated%203rd%2C%204th%20%26%205th%20Schedule.pd f; Securities and Exchange 
Commission of Pakistan (2019), Notification , 25 September. Viewed at: 
https://www.secp.gov.pk/document/listed -companies -code-of-corporate -governance -regulations -
2019/?wpdmdl=36088&refresh=6149d58fd90de1632228751 ; and PwC (2019), The Listed Companies (Code of 
Corporate Governance) Regulations , 2019. Viewed at: 
https://www.pwc.com.pk/en/assets/document/AFF%27s%20document%20on%20the%20Listed%20Companie
s%20(Co de%20of%20Corporate%20Governance)%20Regulations,%202019.pdf . 
51 The minimum wage is revised at least once every three years but serves as no more than a reference 
for the provinces, which have ultimate jurisdiction on the matter. Federal Budget 2021 -22. Vie wed at: 
http://www.na.gov.pk/uploads/1623423111_972.pdf . 
52 Economist Intelligence Unit (2020), Country Commerce – Pakistan , October.  
53 Government of Pakistan/Planning Commission/Ministry of P lanning, Development and Special 
Initiatives (2021), Annual Plan 2021 -22: From Stabilization to Sustainable Growth , June. Viewed at: 
https://www.pc.gov.pk/uploads/annualplan/A nnual_Plan_2021 -22.pdf . WT/TPR/S/424 • Pakistan  
 
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  1.2.5   Balance of payments  
1.20.   During the review period, the current account deficit peaked at 6.1% of GDP in 2017/18 as a 
result of a widened trade gap, and then bottomed at 0.6% of GDP in 2020/21 as a relatively lar ger 
trade deficit was more than offset by stronger remittances inflows and backed by lower demand for 
imported energy, improved business environment, regionally competitive electricity prices for 
export -oriented firms, and the market -determined exchange ra te system (Tables 1.1 and 1.3); 
consequently, current account deficits averaged 2.9% of GDP during 2014/15 -2020/21, same as at 
the period 2007/08 -2013/14.54 According to the authorities, the market -determined exchange rate 
system, resilience in remittances , an improving outlook for exports, and appropriate macroeconomic 
policy settings should help contain the current account deficit at a sustainable 0.7% or a range of 
2%-3% of GDP in FY22 (2021/22).55 As of October 2021, the authorities indicated that there were 
some upside risks – mainly stemming from high international commodity prices, supply chain 
disruptions resulting in manifold higher shipping costs, and the impact of one -offs such as COVID -19 
vaccine imports and wheat and sugar imports to manage domestic shortages – to this estimate. 
However, the market -based exchange rate, which has been depreciating recently in the wake of 
rising imports, is likely to contain the deficit at manageable levels. At the same time, the unfolding 
situation in Afghanistan could also have implications for Pakistan's external account.  
Table 1.3 Balance of payments, 2014/15 -2020/21  
(USD million)  
  2014/15  2015/16  2016/17  2017/18  2018/19  2019/20  2020/21  
Current account  -2,815  -4,961  -12,270  -19,195  -13,434  -4,449  -1,916  
Goods and services balance  -20,243  -22,692  -30,659  -37,329  -32,582  -24,425  -30,145  
Goods balance  -17,267  -19,146  -25,998  -30,903  -27,612  -21,109  -28,188  
Exports  24,090  21,972  22,003  24,768  24,257  22,536  25,630  
Imports  41,357  41,118  48,001  55,671  51,869  43,645  53,818  
Services balance  -2,976  -3,546  -4,661  -6,426  -4,970  -3,316  -1,957  
Receipts  5,872  5,456  5,915  5,851  5,966  5,437  5,882  
Payments  8,848  9,002  10,576  12,277  10,936  8,753  7,839  
Income  -4,599  -5,345  -5,014  -5,437  -5,610  -5,459  -4,613  
Credit  644 610 696 726 578 479 580 
Debit 5,243  5,955  5,710  6,163  6,188  5,938  5,193  
Secondary income  22,027  23,076  23,403  23,571  24,758  25,435  32,842  
Credit  22,291  23,204  23,604  23,800  24,990  25,802  33,135  
Worker remittances  18,721  19,917  19,351  19,914  21,740  23,131  29,370  
Debit 264 128 201 229 232 367 293 
Capital account  375 273 375 376 229 285 235 
Financial account  -5,119  -6,878  -9,855  -13,611  -11,759  -9,313  -8,225  
Foreign direct investment  -960 -2,374  -2,320  -2,772  -1,436  -2,652  -1,786  
Abroad  73 19 86 10 -74 -54 76 
 
54 The improvement in the current account deficit in FY20 (2019/20) was due to two key developments: 
the introduction of the market -determined exchange rate system that acted as an automatic stabilizer, by 
correcting the accumulating  imbalances in the trade account in the pre -COVID period and simultaneously 
helping attract record portfolio flows into domestic debt securities; and the initiation of the EFF programme in 
July 2019, which unlocked USD  1.4 billion in direct financing in th e year and also facilitated the country's 
engagement with other international financial institutions and private investors. State Bank of Pakistan (2020), 
Annual Report 2019 -2020 – The State of Pakistan's Economy . Viewed: 
https://www.sbp.org.pk/reports/annual/arFY20/Complete.pdf ; World Bank Group (2021), Pakistan – Macro 
Poverty Outlook , 17 June. Viewed at: 
https://documents1.worldbank.org/curated/en/304441623940931868/pdf/Pakistan -Macro -Poverty -
Outlook.pdf ; and Government of Pakistan/Planning Commission/Ministry of Planning, Development and Special 
Initiatives (2021), Annual Plan 2021 -22: From Stabilization to Sustainable Growth , June. Viewed at: 
https://www.pc.gov.pk/uploads/annualplan/Annual_Plan_2021 -22.pdf . 
55 According to the authorities, imports are expected to grow significantly (9.5%) in line with stronger 
economic activity and higher oil prices but robust growth in remittances (10%) and mod est growth in exports 
(6.5%) are likely to offset some of their impact. State Bank of Pakistan (2021), Monetary Policy Statement 
July 27, 2021 . Viewed at: https://www.sbp.org.pk/m_po licy/2021/MPS -Jul-2021-Eng.pdf ; and Government of 
Pakistan/Planning Commission/Ministry of Planning, Development and Special Initiatives (2021), Annual Plan 
2021-22: From Stabilization to Sustainable Growth , June. Viewed at: 
https://www.pc.gov.pk/uploads/annualplan/Annual_Plan_2021 -22.pdf . WT/TPR/S/424 • Pakistan  
 
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    2014/15  2015/16  2016/17  2017/18  2018/19  2019/20  2020/21  
In Pakistan  1,033  2,393  2,406  2,782  1,362  2,598  1,862  
Portfolio investment  -1,886  429 250 -2,257  1,274  409 -2,770  
Other investment  -2,271  -4,933  -7,785  -8,582  -11,597  -7,062  -3,669  
Assets  -71 96 1,180  273 -67 -127 471 
Liabilities  2,200  5,029  8,965  8,855  11,530  6,935  4,140  
Net errors and omissions  -33 462 94 -933 -58 150 -991 
Overall balance  -2,646  -2,652  1,946  6,141  1,504  -5,299  -5,553  
Reserve and related items  2,646  2,652  -1,946  -6,141  -1,504  5,299  5,553  
Use of fund credit and loans  1,949  2,009  102 -86 -376 -745 -1,080  
Source:  Data provided by the authorities and State Bank of Pakistan. Viewed at: 
https://www.sbp.org.pk/ecodata/index2.asp . 
1.21.   Pakistan's gross external debt grew considerably, by 78.4% during the period 
2014/1 5-2020/21 to USD  122.2 billion (Table 1.1). As a result, according to IMF data, the debt 
service ratio rose from 26.9% to a projected 46.6% (56.9% in 2021/22) over the same period.56 As 
a percentage of GDP, gross external debt r ose by 70.4%, i.e. from 24% in 2014/15 to 41.0% in 
2020/21 (Tables 1.1 and 1.2).  
1.22.   During the review period, Pakistan's foreign exchange reserves bottomed at USD  14.5 billion 
in 2018/19 and peaked at USD  24.4 billion in 2020/21 due to significant improvement in the current 
account bala nce, the resumption of the IMF EFF, continued access to financing from other 
multilateral agencies (especially the Asian Development Bank (ADB) and World Bank) and 
commercial and bilateral creditors, the issuance of Eurobonds after a gap of over three year s for 
USD 2.5 billion, and the issuance of the country's first -ever green bond of USD  500 million by a 
state-owned hydropower generation entity in May 2021 (Table 1.1); in 2020/21, they were 
equivalent to 8.2% of GDP, 4.8 months of imports of goods and ser vices. According to the 
authorities, the foreign exchange reserves position was expected to continue to improve in 2021 
due to adequate availability of external financing.57 As at 31  August  2021, foreign exchange reserves 
stood at USD  27.1 billion, equival ent to 4.9 months of imports of goods and services.  
1.3  Developments in Trade and Investment  
1.3.1   Trends and patterns in merchandise and services trade  
1.23.   The degree of openness of the Pakistani economy to international trade and its integration 
into the world economy  continued to be reflected by the progressively overall lowering ratio of the 
country's trade (exports plus imports) in goods and services to GDP; although this ratio rose slightly 
from 27.7% in 2014/15 to 28.2% in 2020/21 (Table 1.1), overall, it represen ts a continuous 
decrease in line with the trend at the previous period when it dropped from 35.6% in 2007/08 to 
31.1% in 2013/14.  
1.24.   Since the previous Review, Pakistan's merchandise trade has remained largely dependent on 
textiles and textile articles for ex ports, and mineral products and petroleum and machinery and 
electrical equipment for imports (Chart 1.1, and Tables A1.1 and A1.2). As of 2020, the share of 
textiles and textile articles, live animals/vegetables and products, and base metals and articles 
thereof in total exports had risen, whereas the share of petroleum and mineral products, raw hides 
and skins and articles of leather, and prepared food, beverages, and tobacco had dropped. According 
to the World Bank, Pakistan's exports are comparatively lo w and contribute little to overall growth.58 
 
56 IMF Country Report No.  21/73. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2021/04/08/Pakistan -Second -Third-Fourth -and-Fifth-Reviews -
Under -the-Extended -Arrangement -Under -the-50344 . 
57 State Bank of Pakistan (2021), Monetary Policy Statement July  27, 2021 . Viewed at: 
https://www.sbp.org.pk/m_policy/2021/MPS -Jul-2021-Eng.pdf . 
58 According to the World Bank, in 2018, Pakistan's exports as a share of  GDP were only 9.6%, 
compared with an average of 24.7% of GDP for lower middle -income countries and 18.4% of GDP for 
South  Asia. World Bank Group (2020), Islamic Republic of Pakistan – Leveling the Playing Field – Systematic 
Country Diagnostic , 16 Septembe r. Viewed at: 
https://openknowledge.worldbank.org/bitstream/handle/10986/34549/Pak istan-Systematic -Country -
Diagnostic -Leveling -the-Playing -Field.pdf?sequence=4&isAllowed=y . WT/TPR/S/424 • Pakistan  
 
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  The share of petroleum and mineral products dropped and now account for less than one fourth of 
total imports, whereas machinery and electrical equipment rose to 18.8%.  
Chart 1.1 Product composition of merchandise trade by main HS section, 2014 and 2020  
 
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
1.25.   At the same time, while Pakistan's merchandise trade with countries in the region dropped, 
the pattern of exports strengthened the shares of Europe, the Americas, and Asia -Pacific (Chart 1.2, 
and Tables A1.3 and A1.4). Merchandise trade with most regional trade agreement (RTA) trading 
partners remains negligible (Table  2.3). Its main individual markets remain the European  Union, the 
United  States, the United  Kingdom, and China, and its suppliers are China, the United Arab Emirates, 
the European  Union, and t he United  States.   
1.26.   During the review period, Pakistan remained a net importer of services, running a deficit in 
the services account that progressively peaked at 2% of GDP in 2017/18 and gradually bottomed to 
0.7% in 2020/21 (Tables 1.1, 1.3, and 1.4). Oth er business services, transportation, 
telecommunications, computer and information, and travel remain the major traded services.  
Chart 1.[PAK]  Product composition of merchandise trade by main HS section, 2014 and 2020
2014 2020
Total:   USD 24.7 billion Total:  USD 22.2 billion  
Base metals & 
articles thereof
7.6%Raw hides & skins,
articles of leather
3.3%
Base metals &
articles thereof
9.5% 
Total:   USD 47.5 billion Total:   USD 45.8 billion Vegetable products
13.8%Other
10.3%
Source:  WTO Secretariat calculations, based on UN Comtrade database.Other 
8.3%Base metals &
articles thereof
2.2%
Other
6.2%Transport equipment
3.8%Prepared food, 
beverages & tobacco  
4.3%Other
10.5%
Chemicals 
12.2%Transport equipment
4.9%Base metals & 
articles thereof
3.5%
Raw hides & skins;
articles of leather
5.2%
Vegetable products
8.7%Machinery;
electrical equipment
15.3% Machinery; 
electrical equipment
18.8% 
Plastics & rubber
5.9% Plastics & 
rubber 5.2% Live animals & products
3.5%
Petroleum & mineral products
31.5%Petroleum & mineral products
22.8%Textiles & textile 
articles 6.1%Live animals & products
2.9%
Vegetable products
5.1%Prep. food, beverages
& tobacco 3.5%Exports (f.o.b.)
Imports (c.i.f.)
Fats & oils
4.5%
Fats & oils
4.9%Vegetable products
13.4%
Petroleum & 
mineral products 3.1%Petroleum & 
mineral products
6.4%
Textiles & textile 
articles 7.1%Textiles & 
textile articles 
55.7%Textiles &
textile articles
58.9%
Chemicals 
11.6%WT/TPR/S/424 • Pakistan  
 
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  Chart 1.2 Direction of merchandise trade, 2014 and 2020  
 
Source:  WTO Secretaria t calculations, based on UN Comtrade database.  
Table 1.4 Trade in services, 2014/15 -2020/21  
 
2014/15  2015/16  2016/17  2017/18  2018/19  2019/20  2020/21  
Total credit (USD  million)  5,872.3  5,456.0  5,915.0  5,851.5  5,966.5  5,437.4  5,882.3   
(% of total credit)  
Maintenance and repair 
services  0.1 0.0 0.1 0.1 0.1 0.1 0.1 
Transportation  22.4 20.6 15.6 16.1 14.5 13.6 9.2 
Travel  5.1 5.9 5.4 6.3 7.1 9.0 8.5 
Construction  0.8 0.9 7.6 11.0 7.8 3.1 2.0 
Insurance and pension  1.2 1.0 0.9 0.8 0.8 0.8 0.8 
Financial services  1.8 2.0 2.4 2.4 2.3 2.5 1.7 
Charges for the intellectual 
property  0.1 0.4 0.1 0.2 0.0 0.1 0.2 
Telecommunications, 
computer and information  14.0 14.5 15.9 18.2 20.0 26.5 35.9 
Chart 1.[PAK]  Direction of merchandise trade, 2014 and 2020
2014 2020
Exports (f.o.b.)
Total:  USD 24.7 billion Total:  USD 22.2 billion
EU-27
8.0%Other
7.0%
Other 
Middle East
3.5%United States
3.8%Imports (c.i.f.)
EU-27
7.6%United States
5.6%
Total:  USD 47.5 billion Total:  USD 45.8 billionAfrica
5.8%
Indonesia
5.3%Indonesia
4.4%United States
14.7%
Other Asia/Oceania
12.4%United States
18.6%
Africa
3.0%
Source :  WTO Secretariat calculations, based on UN Comtrade database.Japan
2.5%
China
20.2%China
8.4%
EU-27
28.0% China
9.1%
Africa
7.5%
Japan
3.7%Other Asia/Oceania
11.2%United Arab
Emirates
4.9%EU-27
22.5%Bangladesh
2.8%
Other Middle East
5.2%United Arab
Emirates
5.4%Africa
6.3%
Malaysia
2.4%Other Asia/Oceania
8.5%
Other Asia /Oceania
13.3%Afghanistan
3.9%
United Arab
Emirates
9.8%Malaysia
2.7%Other
10.3%
Kuwait
6.2%Other
Middle East
4.9%China
27.3%Qatar
3.2%Afghanistan
7.6%
Saudi Arabia
9.3%Saudi Arabia
4.1%Bangladesh
2.6%
Other Middle East 
4.8%Other 
6.1%Other 
6.1%
United Kingdom
6.7%
United Kingdom
7.8%
United Arab
Emirates
14.9%WT/TPR/S/424 • Pakistan  
 
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2014/15  2015/16  2016/17  2017/18  2018/19  2019/20  2020/21  
Other business services  13.8 18.5 21.5 23.1 26.3 24.4 24.1 
Personal, cultural and 
recreational services  0.1 0.5 0.3 0.2 0.2 0.2 0.2 
Government goods and 
services n.i.e.  40.5 35.7 30.1 21.6 21.0 19.8 17.3 
Total debit (USD million)  8,848.3  9,002.4  10,575.7  12,277.4  10,936.1  8,753.4  7,839.7   
(% of total debit)  
Maintenance and repair 
services  1.0 1.1 0.6 0.6 1.4 0.7 0.6 
Transportation  47.0 36.3 36.0 32.2 33.3 34.7 37.4 
Travel  17.2 20.4 18.9 18.6 15.6 14.0 10.5 
Construction  0.1 2.7 8.7 10.2 11.0 0.9 0.0 
Insurance and pension  3.0 2.8 2.1 1.8 2.2 3.2 3.1 
Financial services  2.6 2.3 2.8 2.5 3.8 5.3 3.3 
Charges for the intellectual 
property  1.8 2.0 2.1 1.9 1.6 2.1 3.2 
Telecommunications, 
computer and information  4.5 4.2 3.6 3.9 4.0 4.4 7.0 
Other business services  15.9 23.0 20.0 23.7 22.8 29.2 30.2 
Personal, cultural and 
recreational services  0.1 0.1 0.1 0.0 0.0 0.0 0.0 
Government goods and 
services n.i.e.  6.9 4.9 5.0 4.5 4.3 5.4 4.7 
Source:  Data provided by the authorities and State Bank of Pakistan. Viewed at: 
https://www.sbp.org.pk/ecodata/index2.asp . 
1.3.2   Trends and patterns in FDI  
1.27.   Pakistan benefits from a strategic location, natural res ources, and a large skilled work force, 
and maintains a relatively liberal investment regime, which although it was improved through several 
reforms during the review period it seemingly remains a challenging environment for foreign 
investors (Section 2.4) ; a multi -year FDI strategy that aims to gradually increase FDI was launched 
in 2020 (Section 2.4.1).  
1.28.   Inward FDI is not only an additional source of capital, but it also brings with it 
entrepreneurship, management skills, and especially new technology, whi ch contribute to improved 
TFP. During the review period, FDI inflows remained much higher than outflows (Table 1.5 and 
below). They peaked in 2017/18 (USD  3.5 billion) and bottomed the following year. As at 2020/21, 
FDI inflows were largely allocated to se rvices (mainly finance and insurance) and electricity, gas, 
steam, and air conditioning supply; they mainly originated in China, which continued to invest 
heavily under the China -Pakistan Economic Corridor (CPEC) initiative (CPEC, Section 2.3.2.3), and 
the European  Union.  
Table 1.5 Foreign direct investment inflows, 2014/15 -2020/21  
  2014/15  2015/16  2016/17  2017/18  2018/19  2019/20  2020/21  
Total inflows 
(USD  million)  2,842.9  3,256.3  3,110.8  3,494.5  2,785.2  3,322.1  3,025.9  
% of GDP  1.0 1.2 1.0 1.1 1.0 1.3 1.0  
% of total  
By destination         
China  40.2 33.7 26.3 40.6 25.2 29.3 36.0 
Netherlands  0.6 1.5 16.0 3.3 6.9 5.2 9.5 
Hong Kong, China  4.9 5.8 4.1 5.3 7.7 6.1 6.1 
United Kingdom  9.3 9.0 8.0 9.1 8.1 5.5 5.8 
United  States  10.7 10.7 6.3 5.4 4.6 3.3 5.6 
United Arab Emirates  9.5 7.5 7.6 3.0 5.8 4.2 5.6 
Norway  0.1 5.3 3.1 4.0 8.1 13.0 4.6 
Switzerland  2.8 2.8 4.2 2.8 3.4 2.8 3.5 
Germany  0.5 0.5 1.7 1.5 1.9 1.8 2.0 
Malta  0.0 0.0 0.0 0.0 0.0 6.7 1.9 
Singapore  0.9 0.4 1.4 1.7 1.2 0.6 1.3 
Malaysia  0.7 0.6 0.8 4.6 1.1 1.6 1.3 
Italy 4.1 3.4 2.2 1.7 2.0 1.8 1.2 
Japan  2.6 1.2 2.1 2.0 4.3 2.4 1.2 
Sweden  0.1 0.1 0.6 0.8 1.0 0.4 1.2 
Turkey  1.7 0.6 4.5 0.9 2.7 0.8 0.7 
Hungary  0.1 0.0 1.6 2.0 1.4 1.3 0.7 
Poland  0.0 0.0 0.1 0.3 0.0 0.1 0.7 WT/TPR/S/424 • Pakistan  
 
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    2014/15  2015/16  2016/17  2017/18  2018/19  2019/20  2020/21  
Qatar  0.0 0.1 0.0 0.0 0.0 0.3 0.6 
Korea, Republic of  1.0 0.5 0.4 0.6 3.3 1.6 0.6 
Sri Lanka  0.0 0.0 0.0 0.0 0.0 0.3 0.5 
Bahrain, Kingdom of  0.5 0.3 0.4 0.4 0.9 0.6 0.5 
Egypt  0.2 4.5 0.1 1.6 0.3 0.5 0.3 
France  0.6 3.0 1.6 1.0 0.4 0.1 0.3 
Other  8.8 8.6 7.0 7.4 9.8 9.9 8.4 
By sector         
Agriculture, forestry and 
fishing  .. 0.5 0.3 0.4 1.8 0.4 1.6 
Mining and quarrying  .. 5.1 3.5 9.0 9.8 13.1 11.2 
Manufacturing  .. 16.2 35.7 15.9 28.6 13.0 11.9 
Electricity, gas, steam 
and air conditioning 
supply  .. 36.2 24.5 35.0 10.2 23.2 34.4 
Water supply; sewerage, 
waste management and 
remediation activities  .. 0.2 0.7 0.4 0.5 0.1 0.1 
Construction  .. 2.2 1.2 2.4 7.9 4.2 5.3 
Services  .. 39.6 34.1 36.9 41.2 45.9 35.5 
Wholesale and retail 
trade; repair of motor 
vehicles and 
motorcycles  .. 7.4 11.3 10.7 6.8 6.5 8.0 
Transportation and 
storage  .. 5.6 5.7 2.1 5.3 2.2 1.8 
Accommodation and 
food service activities  .. 0.5 0.2 0.1 0.0 0.6 1.4 
Information and 
communication  .. 12.9 4.7 7.0 10.3 24.1 8.0 
Financial and 
insurance activities  .. 12.1 11.4 14.5 15.1 9.9 12.0 
Real estate activities  .. 0.0 0.0 0.1 0.4 0.3 0.5 
Professional, scientific 
and technical 
activities  .. 0.4 0.3 0.5 0.4 0.3 0.5 
Administrative and 
support service 
activities  .. 0.2 0.3 1.0 1.5 0.4 0.7 
Education  .. 0.1 0.0 0.1 0.2 0.2 0.8 
Human health and 
social work activities  .. 0.3 0.1 0.0 0.5 0.5 0.2 
Other  .. 0.2 0.1 0.8 0.6 0.9 1.4 
.. Not available.  
Source:  WTO Secretariat calculations based on data from the State Bank of Pakistan. Viewed at: 
https://www.sbp.org.pk/ecodata/index2.asp . 
1.29.   During the review period, FDI outflows ranged from USD  704.2 million  (2016/17) to 
USD 1.8 billion (2014/15) (Table 1.6). As at 2020/21, FDI outflows remained largely concentrated 
in services (mainly information and communication, transportation and storage, finance and 
insurance) and manufacturing; same as for inflows, its  main locations were China and the 
European  Union.  
Table 1.6 Foreign direct investment outflows, 2014/15 -2020/21  
  2014/15  2015/16  2016/17  2017/18  2018/19  2019/20  2020/21  
Total outflows 
(USD  million)  1,809.1  863.4  704.2  714.2  1,422.8  724.6  1,163.1  
% of GDP  0.7  0.3  0.2  0.2  0.5  0.3  0.4   
% of total  
By destination         
China  44.4 5.6 7.7 14.9 40.1 17.5 28.0 
Netherlands  2.9 2.2 5.6 2.3 8.6 5.3 15.4 
Norway  0.0 0.0 15.3 17.5 7.7 4.1 13.2 
United Arab Emirates  1.9 15.1 16.4 15.2 4.0 25.1 5.8 
Japan  0.2 0.3 1.1 1.3 0.1 2.4 4.1 
United Kingdom  5.2 16.4 4.6 1.9 2.8 8.6 2.9 
Switzerland  4.8 3.6 4.1 2.8 5.2 4.4 2.9 
Singapore  0.0 0.5 0.9 1.0 0.1 0.3 2.6 
Bahamas  0.0 0.0 0.0 0.0 0.0 0.0 2.6 WT/TPR/S/424 • Pakistan  
 
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    2014/15  2015/16  2016/17  2017/18  2018/19  2019/20  2020/21  
Hong Kong, China  0.1 0.3 0.8 0.1 3.0 1.5 2.4 
Australia  0.0 0.0 0.0 0.3 1.7 0.0 2.1 
Sweden  2.9 2.2 0.4 1.0 1.1 0.8 0.9 
Turkey  0.3 0.2 0.7 0.0 0.1 0.0 0.6 
Germany  1.7 3.1 7.4 2.5 0.1 0.1 0.6 
Korea, Republic of  0.7 1.5 0.2 0.0 0.3 0.4 0.6 
Kuwait, State of  0.6 0.6 0.0 17.2 1.9 3.5 0.5 
France  12.9 0.3 2.0 4.1 0.0 0.6 0.5 
Egypt  2.9 0.7 0.8 0.0 0.5 0.1 0.3 
Poland  0.0 0.0 0.0 0.0 0.2 0.0 0.2 
Finland  0.0 0.0 0.7 0.5 0.2 1.4 0.2 
United  States  4.5 38.4 21.2 3.8 2.8 1.3 0.2 
Denmark  0.0 0.1 0.0 0.0 0.1 0.0 0.2 
Other  13.9 8.9 10.1 13.7 19.6 22.5 13.4 
By sector         
Agriculture, forestry and 
fishing  .. 1.6 2.0 1.8 2.9 1.8 4.5 
Mining and quarrying  .. 1.4 1.8 1.4 1.4 0.1 4.2 
Manufacturing  .. 57.8 38.8 29.0 10.9 22.2 17.2 
Electricity, gas, steam 
and air conditioning 
supply  .. 7.4 9.0 5.5 43.5 22.0 22.1 
Water supply; sewerage, 
waste management and 
remediation activities  .. 0.0 0.0 0.1 0.1 0.5 0.8 
Construction  .. 0.0 1.0 2.2 0.5 0.4 0.6 
Services  .. 31.7 47.4 59.9 40.6 53.0 50.6 
Wholesale and retail 
trade; repair of motor 
vehicles and 
motorcycles  .. 2.0 3.0 3.5 5.2 8.6 7.9 
Transportation and 
storage  .. 1.2 1.6 1.5 2.4 11.2 11.4 
Accommodation and 
food service activities  .. 0.0 0.0 10.1 0.1 0.5 0.2 
Information and 
communication  .. 15.0 29.2 27.2 21.8 19.5 17.3 
Financial and 
insurance activities  .. 12.1 7.1 13.4 9.3 5.6 11.0 
Real estate activities  .. 0.4 0.2 0.1 0.1 1.0 1.3 
Professional, scientific 
and technical 
activities  .. 0.1 1.3 0.0 1.0 1.9 0.1 
Administrative and 
support service 
activities  .. 0.4 4.9 2.6 0.4 0.9 0.8 
Education  .. 0.0 0.0 0.0 0.0 3.7 0.1 
Other  .. 0.6 0.0 1.6 0.2 0.1 0.4 
.. Not available.  
Source:  WTO Secretariat calculations based on data from the State Bank of Pakistan. Viewed at: 
https://www.sbp.org.pk/ecodata/index2.asp . 
 
 WT/TPR/S/424 • Pakistan  
 
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  2  TRADE AND INVESTMENT REGIMES  
2.1.  Since its last TPR  in 2015, Pakistan has pursued wide -ranging trade -related and investment 
policies. A Pakistan Regulatory Modernization Initiative (PRMI) was launched in 2021; Statutory 
Regulatory Orders (SROs), a regulatory instrument of concern in the past, remained in p lace. 
Pakistan remains committed to the rules -based multilateral trading system. During the review 
period, it expanded its WTO commitments by ratifying the Agreement on Trade Facilitation (TFA). 
In addition, it continued to focus on strengthening regional economic integration ties through 
initiatives to negotiate or explore the feasibility of regional trade agreements (RTAs)/preferential 
trade agreements (PTAs) with certain countries. Pakistan continues to have some outstanding WTO 
notifications and was inv olved in six new dispute settlement cases during the review period. It also 
undertook efforts to improve its foreign direct investment (FDI) environment in several areas, 
despite persisting limitations in certain activities. Its international investment ag reements are being 
reformed and modernized in line with the global practices.  
2.1  General Framework  
2.2.  During the review period, the Constitution of Pakistan, approved by the Parliament on 
10 April and ratified on 14  August  1973, was subject to four amendments (8  June 2016, 
7 January  2017, 22  December  2017, and 31  May 2018).1 In January 2021, a bill in the Parliament 
to amend the Constitution for holding the Senate elections through open vote was under 
consideration.2 As at July 2021, several constitutional amen dment bills relating to different 
constitutional provisions had been introduced in the Senate.3 
2.3.  Pakistan remains a federal parliamentary democracy. Its President was sworn into office for a 
five-year term in September 2018. The Prime Minister, who is also  head of Government, presides 
over a cabinet of ministers chosen from the elected members of Parliament.4 The Prime Minister is 
responsible for appointing the cabinet as well as running government operations and taking and 
authorizing executive decisions,  appointments, and recommendations that require his/her executive 
confirmation.  
2.4.  The two -house legislative branch remains overall unchanged. The National Assembly (the lower 
house) has 336 seats, 266 of which are elected on a first -past-the-post basis (i.e.  the candidate with 
the plurality of votes is the winner of the seat).5 Of the remainder, 60 are reserved for women and 
10 for non -Muslim minorities; these are allocated on the basis of proportional representation of votes 
secured. The Senate (the upper h ouse) now has 96 (100 until 2018) members: 23 are elected by 
each of the 4 provincial assemblies, and 4 are representatives from the Federal Capital (lower 
house).6 An election to the National Assembly was held in July 2018; the next lower -house poll is 
scheduled to be held in 2023. An election for half of the seats in the Senate was held in March 2018, 
and a ballot for the other half of the seats was held on 3  March  2021.  
 
1 The Twenty -Second Amendment (2016) amended eligibility and age requirements for members of the 
Election Commission, provided for continuity, and added electoral ro lls for local governments as a responsibility 
of the Election Commission. The Twenty -Third Amendment (2017) revived expired provisions of the 
Twenty -First Amendment with certain modifications. The Twenty -Fourth Amendment (2017) modified the 
allocation of N ational Assembly seats among provinces based on the results of the 2017 census. The 
Twenty -Fifth Amendment (2018) merged the Federally Administered Tribal Areas (FATA) with Khyber 
Pakhtunkhwa, one of the four provinces of Pakistan. Constitution of the Isla mic Republic of Pakistan. Viewed 
at: http://www.pakistani.org/pakistan/constitution/ . 
2 The New Indian Express (2021), "Pakistan Government Decides to Amend the Constitution for Senate 
Election", 27  January. Viewed at: https://www.newindianexpress.com/world/2021/jan/27/pakistan -
governmentdecides -to-amend -constitution -for-senate -election -2255609.html . 
3 Senate of Pakistan, Private Members' Bills . Viewed at: 
http://www.senate.gov.pk/en/billsDetails.php?type=2&id= -
1&catid=186&subcatid=276&leftcatid=278&cattitle=Bills . 
4 Economist Intellige nce Unit (2021), Country Report – Pakistan , generated 12  July. 
5 Economist Intelligence Unit (2021), Country Report – Pakistan , generated 12  July. 
6 Following FATA's merger into Khyber Pakhtunkhwa, four FATA seats were abolished (Economist 
Intelligence Uni t (2021), Country Report – Pakistan ; and Shaheen, S. (2021), "Senate Polls on March 3", 
Business Recorder , 12 February. Viewed at: https://www.brecorder.com/news/40063238 ). Elections for 
Pakistan's fo ur provincial assemblies were held in July 2018. The provinces enjoy considerable autonomy; the 
next provincial elections are due in 2023.  WT/TPR/S/424 • Pakistan  
 
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  2.5.  Pakistan's judiciary branch continues to consist of the superior (or higher) courts and 
subordinate (or lower) courts.7 The superior courts are composed of the Supreme Court of 
Pakistan  (the highest appellate court of the country and court of last resort), the Federal Sharia 
Court, and the Five High Court. The subordinate courts consist of civil and criminal courts.  
2.6.  Pakistan remains composed of four provinces (Balochistan, Punjab, Sindh, and Khyber 
Pakhtunkhwa) and the federally administered Islamabad Capital Territory as well as two  autonomous 
territories. The 2010 18th Constitutional Am endment ensured a devolution of power from the federal 
level to the provinces in terms of resources and responsibilities.8 The Federal Government continues 
to be responsible for international and inter -provincial trade and taxation (except agricultural in come 
tax). Discriminatory taxes and other restrictions can be introduced by Parliament so as to ensure 
adequate supply across the country at reasonable prices. Furthermore, the Federal Government has 
the right to restrict inter -provincial movement of goods  under certain conditions.  
2.2  Trade Policy Formulation and Objectives  
2.2.1   Trade policy formulation  
2.2.1.1   Executive branches of government  
2.7.  Trade policy formulation and implementation remains a coordinated process (Table 2.1).9 
The Ministry of Commerce (MoC) is responsi ble for multilateral, bilateral, and regional trade 
arrangements. It also has primary responsibility for trade policy formulation and implementation 
along with the Federal Board of Revenue (FBR), which under the Ministry of Finance administers 
Customs and collects domestic federal taxes on imports. The Ministry's WTO wing deals with 
multilateral issues, including agreements and negotiations. The WTO Council, chaired by the Minister 
of Commerce, comprises many ministers, departmental secretaries, and the cen tral bank governor. 
The Council examines matters relating to WTO Agreements, develops strategies for protecting 
Pakistan's interests while meeting its multilateral obligations, and ensures inter -ministerial and 
inter-provincial coordination. In addition, s tanding parliamentary committees in the Senate and the 
National Assembly also meet as required to supervise the MoC in formulating and implementing 
WTO-related policies.  
2.8.  The Economic Coordination Committee of the Cabinet (ECC), a Federal Cabinet Standing 
Committee chaired by the Prime Minister, remains the relevant forum for consideration of all urgent 
economic matters and coordination of economic policies initiated by relevant Ministries/Divisions of 
the Federal Government.10 It reviews import policies and  their impact on production and investment, 
and evaluates promotional and other export policies. The ECC meets regularly to consider economic 
and trade policy recommendations as submitted by the relevant Ministries/Divisions. 
Recommendations of the ECC are  submitted to the Federal Cabinet for approval.  
Table 2.1 Main ministries and agencies responsible for trade -related issues, 2021  
Government ministry/agency  Key areas of responsibility  
Ministry of National Food Security and Research  Agricultural policy, fisheries, forestry, SPS, quarantine  
Animal Quarantine Department  SPS, quarantine  
Department of Plant Protection  Forestry, SPS, quarantine  
Marine Fisheries Department  Fisheries  
Trading Corporation of Pakistan  State trading, support prices, buffer stocks  
Pakistan Agricultural Storage and Services 
Corporation (PASSCO)  Support prices, buffer stocks  
 
7 Although Pakistan's judiciary was separated from the executive in 2001, the legal system seems still to 
be function ing poorly. Economist Intelligence Unit (2020), Country Commerce – Pakistan , October.  
8 WTO document WT/TPR/S/311/Rev.1, 2  June 2015.  
9 WTO document WT/TPR/S/311/Rev.1, 2  June 2015.  
10 The ECC comprises the Ministers for Finance and Revenue, Communications,  Economic Affairs, 
Energy, Industries and Production, Interior, Law and Justice, Maritime Affairs, National Food Security and 
Research, Planning, Development & Special Initiatives, Privatization, Railways, and Water Resources. In 
addition, the Committee in vites the Deputy Chairman of the Planning Commission, Governor of the State Bank 
of Pakistan, the Chairman of the Securities and Exchange Commission of Pakistan, Special Assistant to the 
Prime Minister on Power/Petroleum, Finance & Revenue, Social Protecti on and Poverty Alleviation, the Advisor 
to the Prime Minister on Commerce and Investment, Institutional Reforms and Austerity, and officers from the 
concerned ministries and departments as and when the need arises (Table 2.1).  WT/TPR/S/424 • Pakistan  
 
- 35 - 
 
  Government ministry/agency  Key areas of responsibility  
Ministry of Economic Affairs and Statistics  External economic assistance, statistics  
Ministry of Finance and Revenue  Finance, revenue (including tariffs and taxes), budgets  
Federal Board of Revenue  Tariffs, taxes, investment incentives  
Ministry of Information Technology  Telecommunications and information technology  
Pakistan Telecommunication Authority  Telecommunications regulation  
Pakistan Electronic Media Regulatory Authority  Broadcasting, television regulation  
Ministry of Communications  Road transport  
Ministry of Energy  Power (Electricity), Petroleum and gas  
Oil and Gas  Regulatory Authority  Oil and gas regulation  
Ministry of Maritime Affairs  Ports and shipping  
Ministry of Privatization  Privatization  
Privatization Commission  Privatization  
Ministry of Railways  Rail transport  
Ministry of Water Resources  Water  
National Electric Power Regulatory Authority  Power regulation  
Ministry of Tourism  Tourism  
Ministry of Commerce  Formulation of trade policy, import and export policies, 
tariffs, WTO coordination, bilateral and other re gional 
agreements, textiles and jute  
Trade Development Authority of Pakistan  Export promotion  
National Tariff Commission  Tariffs, trade remedy measures  
Ministry of Industries and Production  Industrial policy, export processing zones  
Ministry of Science and Technology  National Science and Technology Policy including 
scientific standards  
Ministry of Planning Development and Special 
Initiatives  Planning and development, Poverty Reduction Strategy 
Paper (PRSP)  
Civil Aviation Authority  Air transpo rt 
Competition Commission of Pakistan  Competition policy  
Public Procurement Regulatory Authority  Government procurement implementation  
Pakistan Standards and Quality Control 
Authority  Standards  
Intellectual Property Organization of Pakistan  Intellectual property protection  
Board of Investment  Investment, including foreign, promotion and facilitation, 
investment incentives, special economic zones, ease of 
doing business, regulatory modernization initiative  
Pakistan National Accreditation Council  Accreditation of scientific labs  
Ministry of Postal Services  Postal services  
Source:  Information provided by the authorities.  
2.2.1.2   Advisory bodies  
2.9.  Several policy consultative bodies continue, with public and private sector participation, to 
support efforts for the formulation of a coordinated policy (Section 2.2.1.1). The Government 
receives formal and informal advice from the private sector such as the Federation of Pakistan 
Chambers of Commerce and Industry (FPCCI), which is the apex body of trade and industrial 
chambers and associations representing specific products or industries. Think tank entities providing 
policy formulation advice include the Advisory Committee of the Planning Commission, Pakistan 
Institute of Trade and Development, the Sustainable Development Policy Institute, Quaid I Azam 
University, Lahore University of Management Sciences, the Institute of Business Administration, and 
the Public Private Partnership Authority. Most draft legislation is made available for public comment 
but there is no centralized body to collect public responses.11 The relevant authority gathers public 
comments, if deemed necessary; otherwise, legislation is directly submitted to the legislative branch. 
For business a nd investment laws and regulations, the MoC relies on stakeholder feedback from local 
chambers and associations, such as the American Business Council, the Overseas Investors Chamber 
of Commerce and Industry (OICCI), and the Pakistan Textile Council. Some policy instruments are 
also placed for public feedback on the MoC web portal as was done in the case of National Tariff 
Policy.  
2.2.2   Trade and related policy objectives  
2.10.   Trade and trade -related policy formulation and objectives continue to be shaped by existing,  
revised, or new strategies and/or policies. The Pakistan Vision 2025 policy, launched in August 2014, 
 
11 U.S. Department of State, 2020 Investment Climate Statements: Pakistan . Viewed at: 
https://www.state.gov/reports/2020 -investment -climate -statements/pakistan/ . WT/TPR/S/424 • Pakistan  
 
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  remains aimed at making Pakistan an upper -middle income country by 2025 and a top -10 economy 
by 2047 via five "enablers" (i.e. political stability and po licy continuity, rule of law, shared vision, 
peace and security, and social justice) and seven pillars of development.12 As of November 2021, 
the Government was working on a Three -Year Rolling Growth Strategy, which would focus on specific 
interventions fo r improving trade, export competitiveness, and "product space for exports" 
(e.g. market/product diversification, R&D, and incentives) from Pakistan.  
2.11.   Pakistan's overall trade policy objectives remain those of trade liberalization and facilitation, 
improvem ent of export competitiveness, and reduction of cost of doing business so as to achieve 
higher market access for the country's products in existing markets as well as new markets with the 
ultimate aim of improving the quality of life of the people of Pakis tan through poverty alleviation and 
employment generation driven by export -led growth.13 These objectives continue to be pursued 
through unilateral measures as well as multilateral, regional, bilateral agreements.  
2.12.   A Strategic Trade Policy Framework (STPF) 2015-18 replaced the STPF 2012 -15 giving the 
exporters policy consistency and predictability for a third time in a row; it was focused on addressing 
the lessons learned from the earlier two medium -term frameworks.14 The STPF 2015 -18 had a 
strategic directi on by promoting value addition and innovation through interventions in niche areas. 
It had four pillars: product sophistication and diversification (research and development, value 
addition, and branding); market access (enhancing share in existing markets , exploring new 
markets, trade diplomacy, and regionalism); institutional development and strengthening 
(restructuring, capacity -building, and new institutions); and trade facilitation (reducing cost of doing 
business, standardization, and regulatory measu res). 
2.13.   Since 2018, consecutive efforts have been undertaken to pass a fourth STPF (e.g. STPF 
2018-23 and STPF 2019 -24).15 The latest attempt was the submission of a new five -year STPF 
2020-25 to the Prime Minister for approval in November 2020 before presen ting it to the ECC 
(Section 2.2.1.1).16 Reportedly, under the STPF 2020 -25, a three -tier institutional mechanism was 
proposed for overcoming exporters' problems. Special focus would be on enhancing exports of 
sectors such as textiles, leather, surgical and  sports goods, carpet, rice, and cutlery along with 
non-formal and development sectors like engineering goods, pharmaceuticals, auto parts, processed 
food and beverages, footwear, gems and jewellery, chemicals, meat and poultry, seafood, marble, 
and granit e, where Pakistan has a comparative advantage. As at late July 2021, the ECC had deferred 
the approval of the STPF 2020 -25 for a third time as its formulation has been delayed to align it with 
emerging COVID -19-induced economic dynamics.17 With the onset o f COVID -19, the MoC conducted 
comprehensive consultations with the private stakeholders and duly incorporated their proposals in 
 
12 WTO document WT/TPR/S/311/Rev.1 , 2 June 2015; and Ministry of Planning, Development & Reform, 
Pakistan 2025: One Nation, One Vision – Executive Summary . Viewed at: 
https://www.pc.gov.pk/uploads/vi sion2025/Vision -2025-Executive -Summary.pdf . 
13 Ministry of Commerce, About . Viewed at: https://www.commerce.gov.pk/about -us/about/ . 
14 Ministry of Commerce (2016), Strategic Trade Policy Framework ( STPF) 2015 -18. Viewed at: 
https://www.commerce.gov.pk/wp -content/uploads/pdf/STPF -Final-English.pdf . 
15 Some of the STPF's 2018 -23 and 2019 -24 critical enablers for ex port-led growth, apart from tariff 
rationalization, were to boost exports in the technology and services sector; competitiveness and investment 
linkages, particularly attraction of FDI in the export -related industry; and integration of local industry into the 
global value chain. Furthermore, a draft Trade Related Investment Policy Framework (TRIPF) 2015 -23, 
intended as an integral part of the STPF 2018 -23, was prepared based on similar principles with a view to 
attract investment in export -oriented manufact uring; it also envisaged leveraging the China -Pakistan Economic 
Corridor (CPEC) for regional integration, connecting with global markets and providing access to neighbouring 
markets, especially China. Commerce Division/Ministry of Commerce and Textile (201 8), Draft – Trade Related 
Investment Policy Framework 2015 -23, September. Viewed at: https://www.commerce.gov.pk/wp -
content/uploads /2018/10/Trade -Related -Investment -Policy -Framework -2015-23.pdf ; Link News  (2018), 
"Strategic Trade Policy Framework (2018 -23) to Enhance Country's Trade ", 14 February. Viewed at: 
https://mettisglobal.news/strategic -trade -policy -framework -2018-23-to-enhance -countrys -trade/ . Times of 
Islamabad  (2018), "Pakistan's First Five Yea r Trade Policy 'Strategic Trade Policy Framework 2018 -23 to Be 
Launched", 30  October. Viewed at: https: //timesofislamabad.com/30 -Oct-2018/pakistan -s-first-five-year-
trade -policy -strategic -trade -policy -framework -2018-23-to-be-launched ; Finance Division (2019), Pakistan 
Economic Survey 2018 -19. Viewed at: https://www.finance.gov.pk/survey/chapters_19/8 -
Trade%20and%20payments.pdf ; and Pakistan Observer  (2020), "Strategic Trade Policy", 14  March. Viewed at: 
https://pakobserver.net/strategic -trade -policy -2/. 
16 Abbas, G. (2020), "MoC Submits New Five -Year Trade Policy to PM", Pakistan Today , 8 November. 
Viewed at: https://profit.pakistantoday.com.pk/2020/11/08/moc -submits -new-five-year-trade -policy -to-pm/. 
17 Paracha, S. (2021), "ECC Defer Approval of STPF 2020 -25", Pakistan Today , 28 July. Viewed at: 
https://profit.pakistantoday.com.pk/2021/07/28/ecc -defers -approval -of-stpf-2020-25/. WT/TPR/S/424 • Pakistan  
 
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  the revised draft STPF 2020 -25. Work on a number of STPF -suggested initiatives is already under 
way. For example, a National Ex port Development Board (NEDB) envisaged under the STPF was 
created on 8  July 2021 and is being regularly convened. It seems that none of the previous STPFs 
has been fully successful in meeting their targets.18 
2.14.   A first -ever National Tariff Policy (2019 -24), inter alia,  based on strategic protection and 
temporary import substitution principles, was approved by the Prime Minister on 7  March  2019 and 
was approved by the ECC on 19  November  2019.19 It is aimed at making the tariff structure 
genuinely reflect trad e policy priorities, improving competitiveness through duty -free access to 
imported inputs, rationalizing the tariff structure for enhancing efficiencies, and reducing the relative 
"disincentive" for exporting activities. Furthermore, it is to bolster comp etitiveness via reducing cost 
of doing business, simplifying the tariff structure via removing anomalies, and improving consumer 
welfare. During its implementation period, i.e. 2019 -24, the whole tariff structure would be 
rationalized in line with its obje ctives. The availability of cheaper imported inputs and raw materials 
would increase exports by 2.5% by 2024. The Policy is being implemented through a Tariff Policy 
Board (TPB) chaired by the Advisor to the Prime Minister on Commerce and Investment having  
representation from the Finance Division, Ministry of Industries and Production, the Board of 
Investment (BoI), the FBR, and the National Tariff Commission.  
2.15.   A National SME Policy Action Plan 2020 to provide much -needed support to small and medium -
sized en terprises (SMEs) was approved by the Prime Minister on 8  October  2020.20 The Plan focuses 
on key areas including SME definition, access to finance, business development services, skills and 
human resources, technology, market access, infrastructure, and en trepreneurship. Pakistan's first 
ever E -commerce Policy was approved by the ECC in October 2019.21 It is aimed to facilitate holistic 
growth of e -commerce by creating an enabling environment, reducing cost of doing business, and 
lowering the threshold for enterprises to become part of e -commerce. The policy outlines targeted 
interventions in key areas of regulation, payment infrastructure, taxation, consumer protection, 
logistics, data protection, and SME growth, among others.  
2.16.   As at 2016, under the STPF 201 5-18 (see above) regional trade was to be expanded all over 
Central Asian Republics along with efforts for export development in Association of Southeast Asian 
Nations (ASEAN) and South Asian Association for Regional Cooperation (SAARC) countries.22 
Furthe rmore, an August 2017 Look Africa Policy Initiative, aimed at enhancing connectivity between 
Africa and Pakistan, included trade promotion measures prioritizing Nigeria, Kenya, South  Africa, 
Morocco, Senegal, Algeria, Egypt, Sudan, Tanzania, and Ethiopia ( the top 10 economies of Africa).23 
2.2.3   Trade laws and regulations  
2.17.   The regulatory framework continues to consist of laws, regulations, and ordinances. 
Trade -related measures are contained in laws (acts), ordinances, and regulations, including Import 
and Export Policy orders, and SROs (Table 2.2 and Sections 3.1, 4.1,  and 4.3). SROs are statutory 
instruments/directives of delegated legislation in the form of notifications issued by ministries and 
 
18 Policy Research Institute of Market Economy. Viewed at: https://primeinstitute.org/national -
conference -open-trade -public -private -consultation -stpf-2018-23/. 
19 This draft Policy was based on the principles of: (i) employing tariffs as an instrument of trade policy 
rather than revenue; (ii) maintaining vertical consistency through cascading tariff structures (increasing tariff 
with stages of processing of a product); (iii) providing "strategic protection" to the domestic industry against 
foreign competition during th e infancy phase; and (iv) promoting competitive import substitution through 
"time -bound" protection, which would be phased out to make the industry eventually competitive for 
export -oriented production. Finance Division (2021), Pakistan Economic Survey 202 0-21, June. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf ; and Government of Pakistan, Finance Division, 
Pakistan Economic Survey 2018 -19. Viewed at: https://www.finance.gov.pk/survey/chapters_19/8 -
Trade%20and%20payments.pdf . 
20 Finance Division (2021), Pakistan Economic Survey 2020 -21, June. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf . 
21 Finance Division (2021), Pakistan Economic Survey 2020 -21, June. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf . 
22 Excerpts from the Trade Policy Speech of 22  March  2016 cited at Ministry of Commerce (2016), 
Strategic Trade Policy Framework (STPF) 2015 -18. Viewed at: https://www.commerce.gov.pk/wp -
content/uploads/pdf/STPF -Final-English.pdf . 
23 Ministry of Commerce, Look Africa Policy Initiative . Viewed at: https://www.commerce.gov.pk/look -
africa -policy/ . WT/TPR/S/424 • Pakistan  
 
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  departments to alter on an ad hoc basis the existing regulatory and  fiscal framework.24 They are 
either procedural or concessionary. Concessionary SROs grant tax concessions or exemptions or 
impose extra taxes in the form of additional duties or regulatory duties.25 Procedural SROs provide 
some kind of rule or procedure to carry out laws/amendments in the existing SROs. Earlier, the FBR 
had the discretion to grant concessionary SROs until January  2016 when this authority was 
withdrawn through the Finance Act, 2015.26 Since then only the Federal Government can provide 
exemption from duties and taxes in very limited and specific circumstances like food emergency.27 
SROs are issued after approval of the competent authority and after due process. The process 
involves cons ultations with all stakeholders, after which a case with all details is submitted to the 
ECC of the Cabinet, which takes a decision after detailed deliberations. After this inclusive and 
elaborate process, notifications in the form of SROs are issued to im plement the decisions. SROs 
have been a policy instrument of concern in the past; reportedly, they have been the product of 
lobbying and meant for rent -seeking, therefore distorting the competitive economic environment 
and reducing fiscal revenues.28 Large  businesses appeared to get the tax exemptions benefits at the 
expense of SMEs that seemed unable to fulfil their conditions, thus creating a clear bias against 
small and medium -scale industries. Whereas SROs have been used, inter alia,  to generate additio nal 
revenue for the last three to four years through regulatory duties (Section  3.1), high customs tariff 
rates have required concessions in the form of SROs to new sectors to help them to grow.  
Table 2.2 Main  trade -related legislation, 2021  
Area  Legislation  
Customs  Amendments to Customs Act, 1969  
Import and export 
regulations  Import Policy Order, 2020; Export Policy Order, 2020; Presidential Ordinance 
on Trade Development Authority, 2006  
Standards (imports and 
exports)  Import Policy Order, 2020; Export Policy Order, 2020; Cotton Standardization 
Ordinance, 2002  
Government procurement  Public Procurement Regulation, 2011  
Competition policy  Competition Act, 2010  
Sanitary, phytosanitary 
and quarantine  measures  Import Policy Order, 2020; Export Policy Order, 2020; Animal Quarantine 
(Import and Export of Animal and Animal Products) Ordinance, 1979; 
Amendment Ordinance, 2002  
Marketing and labelling  Import Policy Order, 2020; Export Policy Order, 2020; Dr ugs (Labelling and 
Packaging) Rules, 1986  
Contingency measures  Safeguard Measures Ordinance -II, 2015  
Domestic taxes  Federal Excise Act, 2005  
Tariffs  Finance Act, 2021  
Oil and gas  Oil and Gas Regulatory Authority Ordinance, 2002  
Electricity  NEPRA  Eligibility Criteria for Consumers of Distribution Companies, July  2003; 
Interim Power Procurement (Procedures and Standards) Regulations, 2005; 
National Electric Power Regulatory Authority Consumer Eligibility Criteria 
(amendment) Regulations, 2011  
 
24 At the time of the previous Review, it was indicated that SROs were to be incorporated into regular 
laws and gradually phased out. WTO document WT/TPR /S/311/Rev.1, 2  June 2015.  
25 For example, SRO 1265, issued in October 2018, imposed a "regulatory duty" on the import of 
570 items and was intended to slow import growth. There were concerns about duty increases on inputs 
included in the SRO that would rai se production costs and the price of finished goods manufactured in Pakistan. 
United  States Trade Representative (2021), 2021 National Trade Estimate Report on Foreign Trade Barriers , 
3 March. Viewed at: https://ustr.gov/sites/default/files/files/reports/2021/2021NTE.pdf . 
26 United  States Trade Representative (2021), 2021 National Trade Estimate Report on Foreign Trade 
Barriers , 3 March. Viewed at: https://ustr.gov/sites/default/files/files/reports/2021/2021NTE.pdf ; and Pakistan 
Institute of Development Economics (PIDE) (2021), Webinar Brief on the  Impact of SROs on the Economy of 
Pakistan , 8 February. Viewed at: https://www.pide.org.pk/pdf/brief/Impact -of-SROs -on-the-Economy -of-
Pakistan -Webinar -Brief-18-2021.pdf . 
27 The power to issue SROs under Section 20 of the Customs Act, 1969 has been abolished as 
Section  20 of the Customs Act, 1969 is no longer in place. The authorities indicate that a few SROs that are 
still in place were issued under various statutes and with multiple poli cy intents to provide relief to the exports 
of the country. Furthermore, SROs pertaining to FTAs/PTAs cannot be withdrawn unilaterally by the FBR and 
any such type of action can have severe implications at the diplomatic level.  
28 For example, the auto indu stry is protected under SROs due to which foreign competitors cannot 
easily enter the domestic auto industry. According to an estimate, the costs of concessions under SROs were 
PKR 5,500 billion from 2013 -18 (Section 3.1). PIDE (2021), Webinar Brief on the  Impact of SROs on the 
Economy of Pakistan , 8 February. Viewed at: https://www.pide.org.pk/pdf/brief/Impact -of-SROs -on-the-
Economy -of-Pakistan-Webinar -Brief-18-2021.pdf . WT/TPR/S/424 • Pakistan  
 
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  Area  Legislation  
Financial services, 
including insurance  Securities Act, 2015; Banking Companies Ordinance, 1962  
Telecommunications  Pakistan Telecommunication (Re -Organization) Act, 1996; Pakistan 
Telecommunication Authority (Functions and Powers) Regulations, 2004  
Broadcas ting and 
audiovisual  Pakistan Electronic Media Regulatory Authority Ordinance, 2002; Pakistan 
Electronic Media Regulatory Authority (Amendment) Act, 2007  
Source:  WTO Secretariat; and information provided by the authorities.  
2.18.   No systematic wide -ranging regulatory reform to streamline regulations and reduce the 
regulatory burden to stakeholders was undertaken during the review period until 14  June 2021 when 
a PRMI, a project for all -inclusive regulatory reforms with far -reaching  impact to reduce the 
compliance burden of businesses while improving the effectiveness of the regulatory regime, was 
launched in September 2019.29 The PRMI envisages the stocktaking of all regulations relating to 
establishment and operations of businesses  at federal, provincial, and local government levels with 
the intent of eliminating non -critical requirements as well as simplifying and automating the essential 
ones; a Steering Committee under the BoI (Section 2.4) was established to ensure its 
implement ation.30 A Regulatory Guidebook was designed with the technical assistance of the World 
Bank to provide policymakers, regulators, and private sector stakeholders with the basic concepts 
and tools required to implement the PRMI; it will provide relevant and  applicable references to 
available material on business regulation reforms and modern regulation techniques. As of August 
2021, an initial list of existing Registrations, Licenses, Certificates and Other permits (RLCO) 
requirements at the federal, provinc ial, and municipal levels contained 1,391 such requirements. A 
major deliverable of this project is the establishment of an online one -stop shop called the Pakistan 
Business Portal; once the regulations are mapped and scrutinized to enable businesses to fi nd 
regulatory requirements, in respect of different sectors, they will be able to submit their applications 
electronically and pay the fees/charges online to obtain required licences/permits.  
2.19.   During the review period, no regulatory impact assessment/analys is (RIA) per se  was used in 
the preparation of legal texts, although discussions were undertaken with various stakeholders 
(Section 2.2.1.2).31 RIA methodology for mandatory review of any future regulations, requirements, 
or changes will be a key component  of the Pakistan Regulatory Guidebook (see above).  
2.2.4   Transparency  
2.20.   Pakistan attaches importance to making laws easily accessible. All laws and most 
administrative guidelines or rules are published in Urdu and English in the Government Gazette, 
which is update d monthly, and are available online at the websites of most of the relevant ministries 
and agencies.32 Since August 2014, the National Information Technology Board (NITB), 
commissioned by the Ministry of Information Technology and Telecommunication (MoITT) , has 
facilitated the federal ministries and divisions to implement result -oriented, cost -effective, and 
efficient e -governance programmes to enhance the ability to address the needs of citizens across 
Pakistan.33 However, in 2020 Pakistan ranked 153rd out of 193 economies (159th in 2016) in the 
UN's E -Government Development Index (EGDI).34 
 
29 Prime Minister Initiative for Business Friendly Governance. Viewed at: https://business.gov.pk/ . 
30 Since September 2019, eight Working Groups have been established in different provinces and 
territories to carry out the Regulatory Reforms. Nine training workshops have been conducted for capacity -
building of Regulatory Departments and 25 consultative se ssions with business associations and Chambers of 
Commerce and Industry have been carried out, resulting in the identification of 467 regulatory issues and 
compliance difficulties. In June 2021, a five -year strategy document was launched after consulting a ll public 
and private sector stakeholders. As of August 2021, 143 reform actions had been proposed to 23  departments 
and agencies, of which 53 were completed and the rest were at various stages of implementation.  
31 An RIA is a systemic approach to assessin g the positive and negative effects of proposed and existing 
regulations and non -regulatory alternatives. OECD, Regulatory Impact Analysis: A Tool for Policy Coherence . 
Viewed at: https://www.oecd.org/gov/regulatory -policy/ria -tool-for-policy -coherence.htm . 
32 In addition to specific ministerial websites, legislation is available online, inter alia,  at: 
http://pakistancode.gov.pk/english/index ; http://www.na.gov.pk/en/acts -tenure.php ; and 
http://www.pcp .gov.pk/index .  
33 National Information Technology Board, E-Governance Programs . Viewed at: 
https://nitb.gov.pk/Detail/OWNkMGExNzctOWNhYS00YmU5LTlmZjQtYTU4YTk3OGQwZj Fl. 
34 United Nations (2016), E-Government Survey 2016: E-Government in Support of Sustainable 
Development . Viewed at: https: //publicadministration.un.org/egovkb/Portals/egovkb/Documents/un/2016 -WT/TPR/S/424 • Pakistan  
 
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  2.21.   As in all countries, a lack of transparency, and, thus, a lack of public accountability, creates 
scope for administrative discretion.35 Pakistan signed the UN Convention  against Corruption, whose 
187 parties (as at 6  February  2020) are required to establish criminal and other offences to cover a 
wide range of acts of corruption, on 9  December  2003 and ratified it on 31  August  2007; its 
implementation by Pakistan was exami ned by the Convention's Implementation Review Group 
(1st review cycle, Chapter III regarding Criminalization and Law Enforcement and Chapter  IV 
regarding international cooperation) in 2017, and, in addition to identified technical assistance needs 
to impro ve implementation of the Convention, several recommendations to further strengthen 
existing anti -corruption measures were made and addressed.36 Furthermore, as of October 2021, 
the UNCAC 2nd review cycle (Chapter II Preventative Measures and Chapter -V Asse t Recovery) was 
to be completed by the end of 2021 when the full implementation of the Convention can only be 
assessed. Pakistan is a signatory to the Asian Development Bank/OECD Anti -Corruption Initiative 
but has not signed the OECD Anti -Bribery Conventio n. Despite its anti -corruption initiatives (see 
below), Pakistan continues to rank relatively poorly in the control of corruption indicator and 
corruption perception.37 
2.22.   The Penal Code makes it illegal to offer, pay, or accept a bribe. Companies can be held  civilly 
liable under the Prevention of Corruption Act and the National Accountability Ordinance. Facilitation 
payments and gifts are prohibited but seemingly are common practice in several areas.38 A Public 
Interest Disclosure Act providing whistleblowing  protections for public officials was enacted on 
6 November 2017.39 Under its 2002 anti -corruption strategy, the National Accountability Bureau 
(NAB), Pakistan's apex anti -corruption organization, in 2020 suggested reforms through legislative 
proposals in areas such as public procurement, criminal investigations, land man agement, smart 
urbanization, and state -owned enterprises (SOEs).40 In 2020, NAB recovered PKR  323.29 billion 
from the accused, compared to PKR  141.54 billion in 2019 and PKR  28.8 billion in 2018. In 2020, it 
received 30,405 complaints and finalized them al l; it processed 1,681 complaint verifications and 
finalized 878. Furthermore, under its Awareness and Prevention Strategy, NAB has engaged with 
different governmental and non -governmental organizations, media, civil society, and other 
segments of society t o create awareness among people, especially youth, universities/colleges, and 
school students, as well as to strengthen the regulatory mechanism of federal and provincial 
 
Survey/E -Government%20Survey%202016.pdf ; and United Nations (2020), E-Government Survey 2020: 
Digital Government in the Decade of Action for Sustainable Development . Viewed at: 
https://publicadministration.un.org/egovkb/Portals/egovkb/Documents/un/2020 -Survey/2020%20UN%20E -
Government%20 Survey%20(Full%20Report).pdf . 
35 OECD (2018), OECD Strategic Approach to Combating Corruption and Promoting Integrity , 27 March. 
Viewed at: https://www.oecd.org/corruption/oecd -strategic -approach -to-combating -corruption -and-promoting -
integrity.htm ; and World Bank, Combating Corruption . 
https://www.worldb ank.org/en/topic/governance/brief/anti -corruption . 
36 UN (2017), Conference of the States Parties to the United Nations Convention against Corruption, 
document CAC/COSP/IRG/I/3/1/Add.32, 4  August. Viewed at: 
https://www.unodc.org/documents/treaties/UNCAC/WorkingGroups/ImplementationReviewGroup/ExecutiveSu
mmaries/V1705613e.pdf . 
37 According to the World Bank's Worldwide Govern ance Indicators, in 2019, Pakistan was in the 
21.15  percentile (21.63 in 2015) in the control of corruption indicator, well below South Asia's average of 
37.68 (36.54 in 2015). In 2020, Pakistan ranked 124th of 180 countries on Transparency International's  
Corruption Perception Index (CPI), compared to 117th of 168 countries in 2015, as corruption problems 
persisted due to the lack of accountability and enforcement of penalties, followed by the lack of merit -based 
promotion, and relatively low salaries. The  authorities consider that as the CPI is based on skewed data, it 
does not provide a true picture of the state of corruption and the measures taken for its eradication. World 
Bank Group, Worldwide Governance Indicators . Viewed at: 
http://info.worldbank.org/governance/wgi/Home/Reports ; Transparency International, Corruption Perceptions 
Index, 2015 . Viewed at: https://www.transparency.org/en/cpi/2015/index/pak ; Corruption Perceptions Index, 
2020. https://www.transparency.org/en/cpi/ 2020/index/pak ; and U.S. Department of State, 2020 Investment 
Climate Statements: Pakistan . Viewed at: https://www.state.gov/reports/2020 -investment -climate -
statemen ts/pakistan/ . 
38 GAN Risk & Compliance Portal, Pakistan Corruption Report . Viewed at: 
https://www.ganintegrity.com/portal/country -profiles/pakistan/ ; and National Accountability Bureau, 179 x 
Mega Cases (As on 11 -10-2021) . Viewed at: https://nab.gov.pk/Ops/179%20x%20Mega%20Cases.pdf . 
39 Senate of Pakistan, The Gazette of Pakistan , 7 November  2017. Viewed at: 
http://www.senate.gov.pk/uploads/documents/1511428090_476.pdf . 
40 National Accountability Bureau, About Us . Viewed at: https://nab .gov.pk/home/introduction.asp ; and 
National Accountability Bureau (2021), Annual Report 2020 . Viewed at: 
https://nab.gov.pk/Downloads/NAB%20Annual%20Report%202020.pdf . WT/TPR/S/424 • Pakistan  
 
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  governments for transparency of and compliance with relevant laws. Reportedly, NAB su ffers from 
insufficient funding and staffing.41 
2.3  Trade Agreements and Arrangements  
2.3.1   WTO  
2.3.1.1   Features  
2.23.   Pakistan has been a WTO Member since 1  January  1995 and a member of GATT since 
30 July 1948. It provides at least MFN treatment to all except two WTO Members (In dia and Israel 
(Section  3.1)), and extends MFN treatment to non -WTO trading partners.42 Pakistan accepted the 
WTO TFA, which could cut its trading costs by around 13%, on 27  October  2015 and submitted its 
Category A, B, and C notifications; as of August 20 21, its rate of implementation commitments stood 
at 79% with a time -frame spanning from February 2017 to December 2024.43 Pakistan's trade 
policies have been reviewed four times in the WTO; the last Review was held on 24 and 
26 March  2015. Pakistan is not a signatory to the WTO Plurilateral Agreements including the 
Information Technology Agreement (ITA), but has been an observer to the Agreement on 
Government Procurement (GPA 2012) since 11  February  2015.44 WTO Agreements, once ratified, 
are incorporated in to relevant domestic legislation.  
2.24.   Pakistan remains a supporter of the rules -based multilateral trading system. During the review 
period, it actively participated in WTO work in numerous areas including the outstanding Doha 
Development Agenda issues; specia l and differential treatment to promote development; several 
agricultural trade issues (domestic support, special safeguard mechanism, permanent solution on 
public stockholding for food security purposes (PSH), Net Food -Importing Developing countries 
(NFID Cs) specific measures and flexibilities, and cotton development assistance); fisheries 
subsidies; the programme for micro, small, and medium -sized enterprises (MSMEs); investment 
facilitation for development; trade and environment; domestic regulation deve lopment of measures 
on gender equality (Working Party on Domestic Regulation); electronic commerce and development; 
Trade -Related Aspects of Intellectual Property Rights (including the waiver from certain provisions 
of the TRIPS Agreement for the preventio n, containment, and treatment of COVID -19); and the 
processes and entry into force of reductions of maximum residue levels/limits (MRLs) for plant 
 
41 U.S. Dep artment of State, 2020 Investment Climate Statements: Pakistan . Viewed at: 
https://www.state.gov/reports/2020 -investment -climate -statements/pakistan/ . 
42 The authorit ies indicate that Pakistan is bound by all of its obligations under the WTO Agreement and 
from time to time it needs to impose measures that are necessary for its national security, economic, or other 
political considerations. It has never statedly denied MFN treatment to any WTO Member. Pakistan's trade with 
India requires certain special measures due to its peculiar political situation and national security. These 
measures change from time to time, based on prevailing circumstances. To date, none of these  measures have 
been challenged by any Member. Pakistan does not officially recognize Israel and hence has no political, 
diplomatic, trade, or economic relations with it, and to date, this position has never been contested.  
43 Statement of WTO DG Roberto Aze vedo at Lahore University of Management Sciences on 3  May 2016. 
Viewed at: https://www.wto.org/english/news_e/news16_e/dgra_03may16_e.htm ; WTO, Trade Facilitation 
Agreement Faci lity. Viewed at: https://www.tfafacility.org/notifications -ratifications ; and WTO TFA database. 
Viewed at: https://tfadatabase.org/members/pakistan . 
44 According to October 2020 Pakistan Business Council (an advocacy forum set by 14 of the country's 
leading corporations and business groups) recommendations g uided by its Make -in-Pakistan thrust, i.e. 
reviewing policies by their impact on creating jobs, increasing exports, substituting imports of finished goods 
with locally manufactured products, and increasing tax revenues, Pakistan should not join the Agreeme nt due 
to the likely loss of jobs, reduced potential for exports, discouragement of import substitution of ready -to-sell 
ITA products, and loss in tax revenue. Semiconductor Industry Association (2018), "Industry Groups Call for 
Pakistan to Join Informatio n Technology Agreement", 7  March. Viewed at: 
https://www.semiconductors.org/industry -groups -call-for-pakistan -to-join-information -technology -
agreement/ ; Ahmed, Z. (2017), "Pakistan to Sign the Information Technology Agreement to Stimulate its IT 
Sector", PakWired , 12 September. Viewed at: https://pakwired.co m/pakistan -information -technology -
agreement/ ; Ministry of Commerce, Study of Pakistan's Accession to IT Agreement . Viewed at: 
https://www.commerce.gov.pk/study -on-pakistans -accession -to-it-agreement/ ; Technology Times  (2017), 
"Pakistan Will Join Information Technology Agreement to Gear Up IT Sector", 14  September. Viewed at: 
https://www.technologytimes.pk/2017/09/14/pakistan -will-join-information -technology -agreement -to-gear-
up-it-sector/ ; Pakistan Business Council, A Review to Evaluate the Plausibility of Pakistan's Accession to 
Informatio n Technology Agreement . Viewed at: https://www.pbc.org.pk/research/a -review -to-evaluate -the-
plausibility -of-pakistans -accession -to-information -technology -agreement/ ; and https://www.pbc.org.pk/wp -
content/uploads/PBC -Report -on-Plausibility -of-Accession -to-ITA.pdf . WT/TPR/S/424 • Pakistan  
 
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  protection products in light of the COVID -19 pandemic. At MC11 held in Buenos Aires 
(10-13 December  2017), Pa kistan, inter alia,  stressed that in these times of the Fourth Industrial 
Revolution, digital trade and electronic flows, micro and small enterprises, facilitating investment, 
and sustainable resources and renewable energy, agriculture (including food secu rity) remained the 
lifeline for most economies across the globe; therefore, it was imperative to tackle all of these issues 
head on and find solutions that are inclusive, pragmatic, and creative.45 Pakistan signed the Joint 
Ministerial Statements on Investment Facilitation for Development and the Declaration on the 
Establishment of a WTO Informal Work Programme for MSMEs at MC11; nevertheless, it has not yet 
signed/ratified the December 2020 package  of six recommendations and declarations of the Informal 
Working Group on MSMEs and is currently observing developments in the Investment Facilitation 
initiative.46 
2.25.   During the review period and as of August 2021, Pakistan was involved in six new dispute 
settlement cases.47 It has been a respondent in one case initiated by the United  Arab Emirates, 
concerning anti -dumping measures on biaxially oriented polypropylene film from the United Arab 
Emirates (DS538, 24  January  2018), and a complainant on South  Africa's provisional anti -dumping 
duties on Portland cement from Pakistan (DS500, 9  November  2015). Pakistan participated as a 
third party in three cases involving India (DS588 – tariff treatment on certain goods in the 
information and communications technology  sector, 2  September  2019, complainant 
Chinese  Taipei; DS584 – tariff treatment on certain goods, 10  May 2019, complainant Japan; 
DS582  – tariff treatment on certain goods in the information and communications technology sector, 
2 April 2019, complainant t he European  Union) and one against China (DS511 – domestic support 
for agricultural producers, 13  September  2016, complainant the United  States).  
2.3.1.2   Trade -related technical assistance  
2.26.   Between 2015 and 2018, Pakistan benefited from WTO trade -related assistance  via 
participation in 250 training activities, inter alia,  relating to non -agricultural market access, RTAs, 
TBT, SPS, transparency in government procurement, agriculture, dispute settlement, trade 
negotiation skills, TRIPS, rules (trade remedies, fisherie s subsidies), tariff negotiations, accession, 
trade and environment, services, trade and development, trade finance, transparency and WTO 
notification obligations, trade and competition, trade in value -added statistics and global value 
chains, and trade in  services statistics with emphasis on Africa.48 From 2019 onwards, Pakistan 
participated in various technical -assistance -related activities carried out by the WTO, but no record 
is available on the number of activities in which Government officials partici pated during this period.  
2.27.   Aid for Trade support to Pakistan grew from average disbursements of USD  338.9 million 
during 2006 -08 to USD  1,559.9 million in 2014 -16 and USD  928.3 million in 2017; in 2017, the top 
donors were the World Bank International Devel opment Association (47%), the United Kingdom 
(17%), the United  States (12%), Japan (8%), and the Asian Development Bank (7%).49 In 2017, 
the major beneficiaries were banking and financial services; agriculture, forestry, fishing; energy 
generation and supp ly; and transport and storage.  
2.3.1.3   Notifications  
2.28.   During the review period, Pakistan made regular notifications to the WTO on a few aspects of 
its trade and legislative regimes including domestic support in agriculture and state trading 
(Table  A2.1). However, t here continue to be many outstanding notifications in areas including 
agricultural export subsidies, import licensing procedure requirements, subsidies, SPS, and TBT.  
 
45 WTO document WT/MIN(17)/ST/98, 4  January  2018.  
46 WTO (2020), "Package of Declarations and Recommendations Adopted to Help Small Businesses 
Trade Globally ", 11 December. Viewed at: 
https://www.wto.org/english/news_e/news20_e/msmes_11dec20_e.htm . 
47 WTO, Pakistan and the WTO . Viewed at: 
https://www.wto.org/english/thewto_e/countries_e/pakistan_ e.htm . 
48 WTO, GTAD database, Pakistan . Viewed at: http://gtad.wto.org/ben_country.aspx?entityID=195 . 
49 WTO and OECD (2019), Aid for Trade at a Glance 2019: Economic Diversification and Empow erment: 
Pakistan . Viewed at: https://www.wto.org/english/tratop_e/devel_e/a4t_e/profiles_e/PAK_e.pdf . WT/TPR/S/424 • Pakistan  
 
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  2.3.2   Regional trade agreements  
2.29.   Pakistan continues to consider the multilateral trading system as the cornerstone of its trade 
policy.50 However, it also believes that RTAs are complementary to the multilateral trading system.51 
Pakistan is of the view that successful RTAs can, inter alia,  promote a more predictable and secure 
environment for the su stainable growth of trade between the participating members, expand mutual 
trade through exploring new areas of cooperation, facilitate diversification of trade products, and 
contribute to poverty alleviation and improved livelihood of its population.  
2.30.   Pakistan has been a keen pursuer of bilateral trade and investment agreements as it attaches 
importance to deepening intra -regional trade through RTAs and cooperation arrangements 
(Table  2.3, and Sections 2.3.1, 2.3.2, and 2.3.3).52 It is party to and founding member of several 
long-standing RTAs/PTAs, of which the Economic Cooperation Organization (ECO) accessions of 
Afghanistan and Tajikistan, the SAARC Agreement on Trade in Services (SATIS), and the Preferential 
Trade Agreement am ong D -8 Member States and Pakistan -the Islamic Republic of Iran were not 
notified (Table 2.3). Many of these arrangements have relatively limited product coverage and trade 
importance for Pakistan.53 Tax expenditure estimates of customs duties resulting fr om RTA and PTA 
commitments amounted to PKR 34,210 million in FY21.54 
2.31.   During the review period, virtually all RTAs remained unchanged with developments seemingly 
limited to the signature of a Protocol on the unilateral granting of "zero duty'' on 20 tariff lines to 
Pakistan under the Indonesia -Pakistan Preferential Trade Agreement (IP -PTA) in 2018 and a Protocol 
on Phase -II of the Pakistan -China RTA in 2019 (Sections  2.3.2.3 and 2.3.3.2). However, Pakistan 
has taken initiatives, intensified as from 2020, to negotiate RTAs/PTAs with certain countries, e.g. 
Afghanistan, Azerbaijan, the members of the Gulf Cooperation Council, the Islamic Republic of Iran 
(Section 2.3.2.5), Tunisia, Turkey, and Uzbekistan, as well as to hold discussions for expanding 
bilateral t rade and investment linkages with trading partners such as the Republic of Korea and 
Thailand.55 
Table 2.3 Pakistan's RTAs (notified and non -notified in force): main features, 2021  
RTAs  Main features  
Indonesia – Pakistan  
Type of agreement  Partial Scope Agreement  
Date of signature  03/02/2012  
Entry into force  01/09/2013  
End of implementation period  2019 
 
50 WTO document WT/TPR/S/311/Rev.1, 2  June 2015.  
51 RTAs in the WTO mean any reciprocal trade agreement between two or more partners, not 
necessarily belonging to the same region. PTAs,  meanwhile, refer to unilateral trade privileges such as General 
System of Preferences (GSP) schemes and non -reciprocal preferential programmes that some WTO Members 
implement for products from developing and least -developed countries. WTO, Regional Trade Agreements and 
the WTO . Viewed at: https://www.wto.org/english/tratop_e/region_e/scope_rta_e.htm . 
52 Most texts and details on Pakistan's RTAs/PTAs are available online at 
https://www.commerce.gov.pk/about -us/trade -agreements/ . 
53 For example, according to the authorities, total tariff lines under the RTA with Sri Lanka are 5,766, of 
which 77 (1.3%) are utilized generating exports of USD  146 million out of USD  248 million total exports to this 
destination in 2020. Under the Pakistan -Indonesia RTA, total tariff line coverage including unilateral 
concessions is 279, of which only 25 (8.9%) are utilized by Pakistan a nd represented exports of 
USD 28.4 million out of total exports of USD  135 million to this destination in 2020. Total tariff lines covered 
under the Pakistan -Malaysia RTA are 10,042, of which 395 were active (3.9%) and generated exports of 
USD 102 million out of a total of USD  232 million to this destination in 2020.  
54 Finance Division (2021), Pakistan Economic Survey 2020 -21, June. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.p df. 
55 At the time of the previous Review, it was indicated that Pakistan had commissioned studies on 
possible PTAs with Japan and ASEAN. Dawn  (2021), "3rd Round of Trade Talks with S.  Korea", 7  January. 
Viewed at: https://www.bilaterals.org/?3rd -round -of-trade-talks-with-s; The News: International  (2020), 
"Pakistan, Turkey FTA Talks in April, Says Razak Dawood", 19  February. Viewed at: 
https://www.bilaterals.org/?pakistan -turkey -fta-talks-in-april; Just Style  (2020), "Pakistan and Morocco Move 
Forward on Bilateral Trade Talks", 12  February. Viewed at: https://www.bilaterals.org/?pakistan -and-morocco -
move -forward ; The News: International  (2021), "Pakistan, Bahrain Agreement to Negotiate CEPA", 30  July. 
Viewed at: https://www.bilaterals.org/?pakistan -bahrain -agree -to; Dawn  (2021), "Pakistan, Uzbekistan Agree 
to Finalise Preferential Trade Agreement", 15  July. Viewed at: https://www.bilaterals. org/?pakistan -uzbekistan -
agree -to; and Daily Times  (2021), "Pakistan, Thailand to Work for Free Trade Agreement", 19  May. Viewed at: 
https://www.bilaterals.org/?pakistan -thailan d-to-work-for-free. WT/TPR/S/424 • Pakistan  
 
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  RTAs  Main features  
Coverage (selected features)  Goods  
Pakistan's merchandise trade (2020)  5.25% of total imports; 0.62% of total exports  
WTO consideration status  Factual presentation issued  
WTO document series  WT/COMTD/RTA12  
Pakistan – Malaysia  
Type of agreement  Free Trade Agreement and Economic Integration Agreement  
Date of signature  08/11/2007  
Entry into force  01/01/2008  
End of implementation period  2015 
Coverage (selected features)  Goods and services  
Pakistan's merchandise trade (2020)  2.37% of total imports; 1.05% of total exports  
WTO consideration status  Factual presentations issued  
WTO document series  WT/REG265; WT/COMTD/N/24; WT/COMTD/RTA/3  
Mauritius – Pakistan  
Type of agreement  Partial Scope Agreement  
Date of signature  30/07/2007  
Entry into force  30/11/2007  
End of implementation period  2008 
Coverage (selected features)  Goods  
Pakistan's merchandise trade (2020)  0.01% of total imports; 0.07% of total exports  
WTO consideration status  Factual presentation issued  
WTO document series  WT/COMTD /N/47; WT/COMTD/RTA/7  
China – Pakistan  
Type of agreement  Free Trade Agreement and Economic Integration Agreement  
Date of signature  24/11/2006 (Goods)  
21/02/2009 (Services)  
Entry into force  01/07/2007 (Goods)  
10/10/2009 (Services)  
End of implementation period  2012 
Coverage (selected features)  Goods and services  
Pakistan's merchandise trade (2020)  27.28% of total imports; 8.4% of total exports  
WTO consideration status  Factual presentations issued  
WTO document series  S/C/N/551; WT/REG237  
South Asian Free Trade Agreement (SAFTA)  
Type of agreement  Free Trade Agreement  
Date of signature  06/01/2004  
Entry into force  01/01/2006  
End of implementation period  2016 
Coverage (selected features)  Goods  
Pakistan's merchandise trade (2020)  0.83% of total imports; 3.83% of total exports  
WTO consideration status  Awaiting data from the Parties  
WTO document series  WT/COMTD/N/26  
• SAFTA – Accession of Afghanistan  
Type of agreement  Free Trade Agreement  
Date of signature  03/08/2008  
Entry into force  07/08/2011  
End of implementation period  2030 
Coverage (selected features)  Goods  
Pakistan's merchandise trade (2020) 
including Afghanistan  1.96% of total imports; 7.74% of total exports  
WTO consideration status  Awaiting data from the Parties  
WTO document series  WT/COMTD/N/50  
SAARC Agreement on Trade in Services (SATIS)  
Type of agreement  Economic Integration Agreement  
Date of signature  2010 
Entry into force  29/11/2012  
End of implementation period  .. 
Coverage (selected features)  Services  
WTO consideration status  Not notified  
WTO document series  Not notified  
South Asian Preferential Trade Arrangement (SAPTA)  
Type of agreement  Partial Scope Agreement  
Date of signature  11/04/1993  
Entry into force  07/12/1995  
End of implementation period  2015 
Coverage  Goods  
Pakistan's merchandise trade (2020)  0.83% of total imports; 3.83% of total exports  
WTO consideration status  Factual abstract issued  
WTO document series  WT/COMTD/10  WT/TPR/S/424 • Pakistan  
 
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  RTAs  Main features  
Pakistan – Sri Lanka  
Type of agreement  Free Trade Agreement  
Date of signature  01/08/2002  
Entry into force  12/06/2005  
End of implementation period  2011 
Coverage (selected features)  Goods  
Pakistan's merchandise trade (2020)  0.16% of total imports; 1.14% of total exports  
WTO consideration status  Factual presentation issued  
WTO document series  WT/COMTD/N/27; WT/COMTD/RTA/2  
Economic Cooperation Organization (ECO)  
Type of agreement  Partial Scope Agreement  
Date of signature  17/02/1992  
Entry into force  17/02/1992  
End of implementation period  2015 
Coverage (selected features)  Goods  
Pakistan's merchandise trade (2020)  2.85% of total imports; 5.95% of total exports  
WTO consideration status  No report  
WTO document series  L/7047  
Global System of Trade Preferences among Developing Countries (GSTP)  
Type of agreement  Partial Scope Agreement  
Date of signature  13/04/1988  
Entry into force  19/04/1989  
End of implementation period  1989 
Coverage (selected features)  Goods  
Pakistan's merchandise trade (2020)  20.79% of total imports; 12.06% of total exports  
WTO consideration status  No report  
WTO document series  L/6564 and Add.1  
Protocol on Trade Negotiations (PTN)  
Type of agreement  Partial Scope Agreement  
Date of signature  08/12/1971  
Entry into force  11/02/1973  
End of implementation period  1973 
Coverage (selected features)  Goods  
Pakistan's merchandise trade (2020)  6.49% of total imports; 6.94% of total exports  
WTO consideration status  No report  
WTO document series  L/3598  
Preferential Trade Agreement among D -8 Member States  
Type of agreement  Partial Scope Agreement  
Date of signature  .. 
Entry into force  2016 
End of implementation period  .. 
Coverage (selected features)  Goods  
Pakistan's merchandise trade (2020)  10.30% of total imports; 6.35% of total exports  
WTO consideration status  Not notified  
WTO document series  Not notified  
Pakistan – Islamic Republic of Iran  
Type of agreement  Partial Scope Agreement  
Date of signature  .. 
Entry into force  01/10/2006  
End of implementation period  .. 
Coverage (selected features)  Goods  
Pakistan's merchandise trade  0.81% of total imports; 0.00% of total exports  
WTO consideration status  Not notified  
WTO document series  Not notified  
.. Not available.  
Source:  WTO Secretariat, notified RTAs based on information from the WTO RTA database. Viewed at: 
http://rtais.wto.org/UI/PublicSearchByMemberResult.aspx?membercode=586 . 
2.3.2.1   South A sian Free Trade Area (SAFTA)  
2.32.   Pakistan is a SAFTA signatory whose participants are members of the SAARC, which covers 
more than trade (Table 2.3).56 Tariff reductions commenced in July 2006 and were completed by 
2013 for non -least developed countries (LDCs) and 2016 for LDCs. Under SAFTA's Trade 
 
56 SAFTA/SAARC members: Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, and 
Sri Lanka. The South Asian Preferential  Trading Arrangement  (SAPTA) was SAFTA's precursor (Table 2.3). 
SAFTA was notified under the Enabling Clause in April 20 08.  WT/TPR/S/424 • Pakistan  
 
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  Liberalization Programme, tariff reduction for Pakistan was to occur in two phases. Under Phase -I 
(2006 -2008), tariff rates above 20% were reduced to 20% within two years, and tariff rates below 
20% were reduced on margin of preference basis of 10% per year. Under Phase -II (2008 -2013 
(non-LDCs) or 2016 (LDCs)), tariff rates were reduced to 0 -5%. "Sensitive" lis ted goods are exempt 
from tariff cuts. Pakistan's list of sensitive goods comprises 938 tariff lines at the HS  6-digit level or 
22.6% of the total.  
2.33.   Services are covered under the SATIS based on "positive list" approach and "GATS -plus" 
commitments (Table 2. 3).57 Government procurement, services supplied in the exercise of 
governmental authority, and transportation and non -transportation air services are excluded. It 
provides for MFN and national treatment for services and service suppliers of its contracting  parties 
as agreed and specified in its schedule of specific commitments. Pakistan has shared its initial offer 
list/the Schedule of Specific Commitments under SATIS, covering communications, educational and 
health and related social services, and tourism and travel, with the SAARC Secretariat in October 
2019. The SATIS has not been notified to the WTO.  
2.3.2.2   Pakistan -Sri Lanka  
2.34.   Under the Pakistan -Sri Lanka RTA fully implemented in June 2008 as per agreed tariff 
reduction modalities, tariffs were removed on some 9 0% of Pakistan's tariff lines on a margin of 
preference basis (Table 2.3).58 Currently, 29 tariff lines of Pakistan are granted 20% -50% margin 
of preference, 30 tariff lines (including tea) are subject to tariff rate quota (TRQ), and 992 tariff lines 
are in the No Concession List at HS 8 -digit level. The remaining tariff lines have been phased out to 
zero duty. Both parties agreed to include services and investment.  
2.3.2.3   Pakistan -China  
2.35.   Under Phase -I of this RTA (CPFTA) (Table 2.3), Pakistan reduced or removed se lected tariffs 
progressively over five years.59 Pakistan's reductions under Phase -I covered 5,686 eight -digit tariff 
items (about 83.6% of total tariff items). Rates were reduced immediately by 25% on Category I 
goods and were phased out in three equal ins talments by 2010 (35.6% of 8 -digit tariff items); 
immediately lowered by 20% on Category II goods and were reduced to or below 5% in five equal 
instalments by 2012 (19.9% of tariff items); immediately reduced by 8% on Category III goods and 
phased to a 50%  margin of preference in five generally equal instalments by 2012 (2% of tariff 
items); and reduced immediately by 3% on Category IV goods and phased to a 20% margin in 
five generally equal instalments in 2012 (26.1% of tariff items). Category V and VI goo ds were not 
subject to concessions or reductions.  
2.36.   An Amending Protocol on Phase -II of the CPFTA was signed on 28  April 2019, and its tariff 
reduction modalities have been implemented since 1  January  2020; the authorities indicated that it 
was to be notifie d to the WTO by December 2021.60 Under Phase -II, Pakistan has secured enhanced 
and deeper concessions on products of its export interest, revision of the safeguards mechanism for 
protection of the domestic industry, inclusion of a balance -of-payments claus e as a safety valve 
against BoP difficulties, and effective enforcement of the electronic data exchange.61 Under Phase -II, 
 
57 SATIS stipulates that initial offers of the WTO  Member contracting states shall be in addition to their 
existing levels of multilateral commitments with substantial sectoral and modal improvement over those 
commitments. SAARC, SAARC Agreement on Tra de in Services (SATIS) . Viewed at: https://www.saarc -
sec.org/index.php/resources/agreements -conventions/45 -saarc -agreement -on-trade-in-services/file ; and 
Kelegama, S. (2012), Regional Trade Agreements in South Asia: Current Outlook and Challenges , UNESCAP. 
Viewed at: https://www.unescap.org/sites/defau lt/files/Saman -Kelegama.pdf . 
58 The Agreement was notified under the Enabling Clause in June 2008.  
59 The Agreement was notified under Article  XXIV of the GATT and Article  V of the GATS in January 2008 
and May  2010. Ministry of Commerce, Pak-China Free Trade Agreement in Goods & Investment . Viewed at: 
https://www.commerce.gov.pk/about -us/trade -agreements/pak -china -free-trade-agreement -in-goods -
investment/ . 
60 Ministry of Commerce, Protocol to Amend the Free Trade Agreement between the Go vernment of the 
People's Republic of China and the Government of the Islamic Republic of Pakistan . Viewed at: 
https://www.commerce.gov.pk/protocol -on-phase -ii-china -pakist an-fta/. 
61 Regarding safeguard measures (SGMs), the following changes were introduced under Phase -II: in 
Phase -I, SGMs were limited to the absolute increase in imports, but now can be invoked on relative increase in 
imports as well; the transition period h as been increased to 10 years for CAT -I and 8 years for the remaining 
tracks, which in relation to the Tariff Reduction Modality will be 15 years for CAT -II and 23 years for CAT -III; 
SGMs can be applied for 3 years, and can be extended to an additional 2 y ears; in Phase -I SGMs, injury to the WT/TPR/S/424 • Pakistan  
 
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  both countries will eliminate duties on 75% of tariff lines for each other in a period of 10 (China) or 
15 (Pakistan) years. Pakistan  has offered market access to China on raw materials, intermediate 
goods, and machineries.62 Its protected tariff lines (1,760 or 25% of all tariff lines) were listed and 
include textiles and clothing, iron and steel, auto, electrical equipment, agricultur e, chemicals, 
plastics, rubber, paper and paper board, ceramics, glass and glassware, surgical instruments, 
footwear, leather, wood, articles of stones and plaster, and miscellaneous goods. China was to 
immediately eliminate tariffs on 313 of the highest -priority tariff lines of Pakistan's export interest. 
Overall, China has granted concessions to products that include textiles and garments, seafood, 
meat and other animal products, prepared foods, leather, chemicals, plastics, oil seeds, and 
footwear, as we ll as engineering goods including tractors, auto parts, home appliances, and 
machineries.  
2.37.   Under the provisions of the existing Agreement on Trade in Services (Table 2.3), Pakistan 
provides China with access to 11  sectors and 107 subsectors out of a possibl e 160 subsectors on a 
national treatment basis; China provides market access to Pakistan in 11 sectors and 133  subsectors 
on a national treatment basis. At the time of the previous Review, the Agreement was being 
renegotiated and it was mutually decided to  pursue work after the conclusion of negotiation on 
Phase -II of CPFTA in goods; as of November 2021, Pakistan was undertaking internal consultations 
in this respect.  
2.38.   Under the China -Pakistan Economic Corridor  (CPEC), a series of infrastructure projects hav e 
been under implementation throughout Pakistan since 2013. CPEC is intended to rapidly upgrade 
Pakistan's required infrastructure and strengthen its economy by the construction of modern 
transportation networks, numerous energy projects, and special econo mic zones (SEZs) 
(Section  2.4.5).63 On 13  November  2016, CPEC became partly operational when Chinese cargo was 
transported overland to Gwadar Port, an important node of the Economic Corridor, for onward 
maritime shipment to Africa and West Asia, while some  major power projects were commissioned 
by late 2017. As of October 2021, 21 projects had been completed and 34 were under 
implementation. In the case of infrastructure, five projects were completed and six were under 
implementation. Similarly, nine projec ts in the energy sector had been completed while eight were 
under implementation. Out of six Gwadar projects, two had been completed. In the area of 
socio-economic development, 27 projects were identified and 5 had been completed. Moreover, two 
economic zo nes along the Corridor and nine SEZs have been selected for all the provinces of 
Pakistan, out which four SEZs have been given priority.  
2.3.2.4   Pakistan -Malaysia  
2.39.   Under this comprehensive RTA, Pakistan was to eliminate tariffs on 44.2% of its current 
imports from Malaysia by 2012 (Table 2.3).64 Malaysia was to eliminate tariffs on 78% of imports 
from Pakistan. The Agreement has been fully implemented in line with the agreed tariff reduction 
modalities. There have been four concessionary tracks: Fast Track (immediat e reduction of duties 
to zero); Normal Track (duties reduced to zero as of 2012); Sensitive Tracks (Sensitive Track -I, 
Sensitive Track -II, and Sensitive Track -III, wherein duties were brought down to 5%, 10%, and 
20%, respectively, as of 2014); and 15% Mar gin of Preference (10% since 2008, plus 5 percentage 
points since 2009). Overall, for trade in goods Pakistan offered duty -free access on 48% of the 
liberalized tariff lines and 138 tariff lines have been granted Margin of Preference. Malaysia has 
offered zero duty on 74% of the liberalized tariff lines. At the time of the previous Review, the 
authorities stated that the Agreement was being reviewed and as of November 2021 it was still being 
negotiated.  
2.40.   In trade in services, both countries have provided GAT S-plus market accesses to each other. 
In the field of computer and IT -related services, Islamic banking, and Islamic insurance, Pakistan 
has secured 100% equity in Malaysia. Mutual recognition arrangements providing a framework for 
 
industry had to be proven but an emergency measure of 180 days can be imposed in Phase -II without proving 
injury.  
62 Pakistan's tariff elimination schedule is available online at https://www.commerce.gov.pk/wp -
content/uploads/2019/05/Tariff -Elimiantion -Schedule -of-Pakistan -final.pdf . 
63 Ministry of Planning, Development, & Special Initiatives, CPEC Autho rity. Viewed at: 
http://cpec.gov.pk/ . 
64 The Agreement was notified under the Enabling Clause and Article  V of the GATS in February 2008.  WT/TPR/S/424 • Pakistan  
 
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  accreditation of educati onal institutions and academic programmes and investment facilitation 
entrepreneurs of both countries are also covered.  
2.3.2.5   Pakistan -Islamic Republic of Iran  
2.41.   Under this PTA (Table 2.3), Pakistan extended preferential tariff margins of 5%, 10%, 15%, 
20%, or 30% (mainly 10% and 30%) on 338 six -digit tariff items from 1  September  2007. It has 
not been notified to the WTO. According to the authorities, same at the previous Review, trade under 
the Agreement remains minimal due to international sanctions on the Is lamic Republic of Iran. As of 
April 2021, efforts had been initiated to sign a bilateral FTA and as of October 2021 four negotiation 
meetings on the Technical Negotiation Committee on FTA had been held.65 
2.3.2.6   Pakistan -Mauritius  
2.42.   Under this fully implemented PTA  (Table 2.3), Pakistan committed to eliminate tariffs on 1.1% 
of its tariff (130  tariff lines). Pakistan extends preferential tariffs (initially of 50% and full removal 
after one year) to Mauritius on a range of goods, including fresh flowers, fruits, tea,  tinned tuna, 
sugar, soap, certain food preparations, pasta, non -alcoholic beverages, and certain knitted textiles. 
Imports of certain other textile products receive a preferential tariff margin of 40% but subject to 
tariff quotas totalling some 8  million pieces annually. Six memoranda of understanding were also 
signed to promote bilateral trade and cooperation, including in customs, SMEs, state trading 
corporations, technical standards, sanitary and phytosanitary measures, fisheries, and export 
promotion. Same as at the previous Review, the authorities indicate that trade under the Agreement 
was limited and concentrated in rice.  
2.3.2.7   Pakistan -Indonesia  
2.43.   Under this agreement (Table 2.3), Pakistan provides preferential tariff rates ranging from 
zero to 24% to 313 i tems from Indonesia.66 In addition, Pakistan extends a 15% margin of 
preference over the standard tariff rate to Indonesian palm oil products, similar to that extended to 
Malaysian palm oil products under the Pak -Malaysia RTA (Section 2.3.2.4). During the review period, 
Indonesia granted unilateral "zero duty" access to Pakistan for 20 additional tariff lines; a Protocol 
to this effect was signed in January 2018 and the newly granted market access has been operational 
since 1  March  2019.67 Indonesia grants preferential tariff treatment at rates ranging from zero to 
9% to 232  Pakistani export products including fresh fruits, cotton yarn, cotton fabrics, ready -made 
garments, fans (ceiling, table, and pedestal), sports goods (badminton and tennis rackets), leat her 
goods, and other industrial products.68 
2.3.2.8   Organization of Islamic Conference (OIC)  
2.44.   The Framework Agreement on the Trade Preferential System Among OIC Member States (TPS -
OIC) has 18 signatories, including Pakistan, and is still not operational. This syste m is based on 
three agreements, namely the Framework Agreement, the Protocol on Preferential Tariff Scheme 
(PRETAS), and the Rules of Origin. PRETAS, adopted in 2005, called for specific tariff reductions on 
an agreed timetable. The second round of negotia tions, launched in November 2006, declared a 
road map and target date of 1  January 2009 to establish PRETAS. Pakistan has signed and ratified 
the agreements. In order to make the TPS -OIC system operational, 10 member States have to fulfil 
2 conditions at t he same time, namely the ratification of the 3 TPS -OIC Agreements and the 
submission of the list of concessions to the TNC Secretariat. As of December 2014, the required 
number of countries having met necessary requirements had been reached. However, for t he entry 
into force of the System there are some practical steps, including the updating the concession lists 
under the same format. By February 2019, Turkey, Malaysia, Pakistan, Jordan, Bangladesh, the 
Islamic Republic of Iran, and Morocco had conveyed th eir updated concession lists in the agreed 
 
65 Dawn  (2021), "Iran to Ink Free Trade Agreement with Pakistan: Envoy", 15  April. V iewed at: 
https://www.bilaterals.org/?iran -to-ink-free-trade-agreement . 
66 Ministry of Commerce, Notification , 28 August  2013. Viewed at: https://www.commerce.gov.pk/wp -
content/uploads/pdf/SRO_74112013_Pak -offer-list.pdf . 
67 Ministry of Commerce, 20 Tariff Lines Offered by Indonesia to Pakistan under the Preferential Trade 
Agreement . Viewed at: https://www.commerce.gov.pk/wp -content/uploads/2019/03/20 -Tariff-Lines.pdf . 
68 Ministry of Commerce. Viewed at: https://www.commerce.gov.pk/wp -
content/uploads/pdf/Indonesia_offer_list_Regulation.pdf . WT/TPR/S/424 • Pakistan  
 
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  format.69 At the TPS -OIC Trade Negotiating Committee meeting held on 1 -2 June 2021, it was 
decided that 1  July 2022 would be the cut -off date for the effectuation of the system.  
2.3.2.9   Developing -8 group of countries (D -8) 
2.45.   The D -8 Group, a development and economic cooperation arrangement comprising Pakistan, 
Bangladesh, Egypt, Indonesia, the Islamic Republic of Iran, Malaysia, Nigeria, and Turkey, signed 
the Preferential Trade Agreement (PTA) in 2006 (Fifth Summit). The P TA, which has not been notified 
to the WTO, calls for tariffs above 10% to be reduced in four annual instalments (eight for least 
developed members) on 8% of members' total tariff lines but, as indicated at the time, agreement 
is not operational due to lac k of completion of internal processes by members, whereas Pakistan has 
met all the requirements; as of November 2021, only Egypt's ratification was pending whereas 
Pakistan had met all requirements (including concession list) as of June 2013.70 
2.3.2.10   Economic Co operation Organization Trade Agreement (ECOTA)  
2.46.   ECO's trade -related Vision 2025, announced in February 2017, consists of doubling 
intra-regional trade, increasing share in global trade, and tapping regional trade potential for 
economic growth.71 Under the ECOTA (Table 2.3), Pakistan is to provide preferential tariff margins 
of 10 percentage points on the same imported items as those eligible under SAFTA. Tariffs are to be 
reduced to a maximum rate of 15% within 8 years (15 years for Afghanistan).  Sensitive goods 
excluded from tariff reductions are limited initially to 1% of members' 6 -digit tariff items, and the 
coverage of the positive list of reductions is to be expanded proportionately in eight equal annual 
stages to 80% of members' tariff line s. ECOTA excludes trade in services. Under the Vision 2025 
plan, in January 2018 five ECOTA contracting Member States (Afghanistan, the Islamic Republic of 
Iran, Pakistan, Tajikistan, and Turkey) were to agree to implement the agreement, and as from 
Januar y 2025 all Members should ratify it and provide a product list.72 Furthermore, the scope of 
ECOTA preferences would be enhanced and ratified by no later than December 2022. In practice, as 
of August 2021, ECOTA had not been implemented owing to the non -submission of concession lists 
by the Islamic Republic of Iran and Tajikistan.  
2.3.2.11   Other  
2.47.   Pakistan has maintained preferential tariffs under the GATT Protocol Relating to Trade 
Negotiations Among Developing Countries and the Global System of Trade Preferences (GST P) 
(Table 2.3). Its GSTP commitments cover seven 4 -digit HS items.  
2.3.3   Preferential trade arrangements  
2.48.   Pakistan remains a beneficiary under the GSP schemes of Australia, Canada, Belarus, the 
European  Union, Kazakhstan, Japan, New  Zealand, Norway, the Russian  Federation, Switzerland, 
Turkey, and the United  States.73 Since 1  January  2014, Pakistan has benefited from generous tariff 
 
69 Pakistan conveyed its updated concession list to the COMCEC Coord ination Office on 
3 September  2015. Standing Committee for Economic and Commercial Cooperation of the Organization of the 
Islamic Cooperation, Member States that Signed/Ratified the TPS -OIC Agreements (Until September 2018) . 
Viewed at: http://www.comcec.org/en/tps -oic/. 
70 D-8 Organization for Economic Cooperation (2018), D-8 Facts Sheet . Viewed at: 
http://developing8.org/wp -content/uploads/2018/12/Facts -Sheet.pdf . 
71 ECO is an intergovernmental regional organization created in 1985 by the Islamic Republic of Iran, 
Pakistan, and Turkey for the purpose of promoting economic, technical, and cultural cooperation among the 
Member Stat es. In 1992, the Organization was expanded to include seven new members, namely Afghanistan, 
Azerbaijan, Kazakhstan, the Kyrgyz  Republic, Tajikistan, Turkmenistan, and Uzbekistan. The Agreement was 
notified under the Enabling Clause in July  1992. Economic Cooperation Organization (2017), ECO Vision 2025 
and Implementation Framework , February. Viewed at: 
http://www.eco .int/parameters/eco/modules/cdk/upload/content/general_content/3624/1506486491201cflnbt
m0acra83f5arho4dgc65.pdf ; and Trade Related Part of Vision 2025 . Viewed at: 
http://www.eco.int/general_content/87001 -Trade -Related -Part-of-Vision -2025.html?t=General -content . 
72 Economic Cooperation Organization (2017), ECO Vision 2025 and Implementation Framework , 
February. Viewed at: 
http://www.eco.int/parameters/eco/modules/cdk/upload/content/general_content/3624/1506486491201cflnbt
m0acra83f5arho4dgc65.pdf . 
73 UNCTAD (20 18), Generalized System of Preferences: List of Beneficiaries . Viewed at: 
https://unctad.org/system/files/official -document/itcdtsbmisc62rev7_en.pdf . WT/TPR/S/424 • Pakistan  
 
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  preferences (mostly zero duties on two thirds of all product categories) under the so -called GSP+ 
arrangement of the European  Union, aiming to support sustainable development and good 
governance; this status was extended till 2023.74 Under GSP+, Pakistan's exports to the 
European  Union rose by 47% from USD  6.09 billion in 2013 to USD  8.94 billion (including the 
United  Kingdom) in 2021; the main beneficiary was the textiles and garments sector, which, 
inter alia, provided employment opportunities, especially for women.75 In 2019, Pakistan was 
positioned as the 9th beneficiary of the United  States GSP scheme; total US imports from Pakistan  
under the GSP Programme amounted to USD  344.6 million or 8.72% of total US imports from 
Pakistan and rose by 37.5% to USD  474 million in 2020 or 11.5% of total exports to this market.76 
2.4  Investment Regime  
2.49.   Pakistan maintains a relatively liberal investment regime, which applies equally to both 
nationals and foreigners. However, there are exceptions in certain sectors where there are equity 
limits on foreign investment or where foreign investment is completely prohibited (Section 2.4.3). 
During the  review period, Pakistan's ease of doing business rose significantly as a result of several 
reforms including the expansion of the procedures covered by the online one -stop shop 
(Section  2.4.4), the major reduction of time required for obtaining constructi on permits, the 
improvements leading to easier access to electricity, the transparency in electricity rates, and the 
easier payment value -added and corporate income taxes. Nevertheless, despite improvements, it 
seems that Pakistan remains a challenging env ironment for foreign investors.77 Consequently, in 
2020, the authorities launched a multi -year FDI strategy that aims to gradually increase FDI 
(Section  2.4.1).  
2.4.1   Policy and institutional framework  
2.50.   As from 2020, Pakistan's Investment Policy 2013, aimed to re ducing the costs (and increasing 
the ease) of doing business, has been supported by an Investment Promotion Strategy 2020 -23, 
which outlines enhanced facilitation procedures and the one -window -operation role of the BoI. This 
new Strategy, launched in Augus t 2020, is mainly focused on seven priority sectors selected on the 
basis of comparative and competitive advantage, global outward FDI trends, employment 
generation, capability, and import substitution potential.78 They consist of food processing, 
informat ion technology (IT) and IT -enabled services, automotive, value -added textiles, tourism, 
housing, and logistics. This strategy targets FDI to rise to USD  4 billion in FY2020/21, and 
USD 4.5 billion and USD  5 billion in each following year. Under the same st rategy, an Investor 
Relationship Management System (IRMS) for proactive interaction of BoI promotion officers with 
investors was launched on 14  June 2021.79 
2.51.   The institutional setting in this area remains unchanged. Under BoI Ordinance 2001, the BoI 
remains  mandated, inter alia,  to develop and implement investment policies, approve investment 
 
74 In order to m aintain GSP+ treatment, Pakistan has to keep ratification and effectively implement 
27 core international conventions on human and labour rights, environmental protection, and good 
governance. European Commission, Countries and Regions: Pakistan . Viewed at : 
https://ec.europa.eu/trade/policy/countries -and-regions/countries/pakistan/ . 
75 Mustafa, K. and Haider, M. (2020), "EU Extends GSP Plus Status to Pakistan Till 202 2", The News 
International , 7 March. Viewed at: https://www.thenews.com.pk/print/625091 -eu-extends -gsp-plus-status -to-
pakistan -till-2022. 
76 Pakistan Bu siness Council, Pakistan and the US GSP Opportunity . Viewed at: 
https://www.pbc.org.pk/research/pakistan -and-the-us-gsp-opportunity/ . 
77 Reportedly, an improving but unpredictable security situation, difficult business climate, lengthy 
dispute resolution processes (Section 2.4.6), poor intellectual property rights enfor cement (Section 3.3.7), 
inconsistent taxation policies, and lack of harmonization of rules across Pakistan's provinces continue to 
hamper private enterprises and have contributed to lower FDI levels as compared to regional competitors. 
U.S. Department of S tate, 2020 Investment Climate Statements: Pakistan . Viewed at: 
https://www.state.gov/reports/2020 -investment -climate -statements/pakistan/ ; and Economist Intelligence  
Unit (2020), Country Commerce – Pakistan , October.  
78 By contrast, the previous five -year FDI strategy for 2013 -17 emphasized investments in agriculture, 
automotive, construction and real estate, dairies, energy, fisheries, infrastructure communication, li vestock, 
manufacturing, and mining and exploration. It outlined goals and plans to progressively increase net FDI 
inflows of USD  2 billion in the first year, and then growing annually by 25% to reach USD  5.5 billion in 2018, a 
target that was not met. WTO document WT/TPR/S/311/Rev.1, 2  June 2015; and Economist Intelligence Unit 
(2020), Country Commerce – Pakistan , October.  
79 Invest Pakistan. Viewed at: https://invest.gov.pk/ . WT/TPR/S/424 • Pakistan  
 
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  projects, and promote investment in Pakistan. The BoI is headed by the Prime Minister, and, as from 
30 April 2019, its reconstituted Board has also comprised the Minist er of Finance and Revenue, the 
Advisor to the Prime Minister on Commerce and Investment, the Minister of Industries and 
Production, the Minister of Energy, Chair of the BoI, Secretary of the BoI, and not less than 7 and 
not more than 25 ex officio  members and non -official members, provided that not less than 
3 non-official members are appointed from the private sector.80 
2.4.2   Regulatory framework  
2.52.   During the review period, the investment -related legal framework was updated with the 
Companies Act 2017 (last amende d in 2020), which covers all matters starting from the 
incorporation of a company in Pakistan to its winding -up, and the Public Private Partnership Act 
2017, which provides a regulatory framework to attract domestic and foreign private investment in 
the de velopment of public infrastructure projects.81 The Companies Act 2017, inter alia,  provides 
corporate compliance for foreign companies that establish in Pakistan, lists the rights of minority 
shareholders in a company, and provides that any person who hold s 10% of the shareholding of a 
company is a minority shareholder; as of October 2021, an amendment for decreasing this share to 
5% (approved by the National Assembly) was awaiting Senate approval. Minority shareholders can 
move to the high court for the wi nding -up of a company where the company is conducting its 
activities in a manner that is oppressive to the minority members, and can also file a complaint 
directly to the high court where the affairs of a company are being conducted or are likely to be 
conducted in a manner that is oppressive or unfairly prejudicial to the public interest. Furthermore, 
under t he Foreign Private Investment (Promotion and Protection) Act of 1976 and the Protection of 
Economic Reforms Act of 1992, all foreign investors are acc orded fair and equitable treatment 
without discrimination in relation to the establishment, expansion, management, operation, and 
protection of their investments, as well as the right to due process of law (Section  2.4.6).82 The 
Foreign Private Investment (Promotion and Protection) Act of 1976 provides specific guarantees 
against nationalization of approved investments. Foreign investors in any sector can at any time 
repatriate profits, dividends, or any other funds in the currency of the country from which  the 
investment originated.  
2.4.3   Restricted activities  
2.53.   All sectors and activities remain open for foreign investment unless specifically prohibited or 
restricted for reasons of national security and public safety. Specified restricted industries continue 
to comprise arms and ammunitions; high explosives; radioactive substances; securities, currency, 
and mint; and consumable alcohol.  
2.54.   Under the Investment Policy 2013 and the 2017 Companies Act (Section 2.4.2), minimum 
initial capital investment requ irements across sectors were eliminated so that no minimum 
investment requirement or upper limit on the share of foreign equity is required, with the exception 
of the domestic commercial air transport carriers (up to 49%), banking (49%), and agriculture 
(60%); special conditions apply to the construction and media sectors.83 In the agricultural sector, 
 
80 Invest Pakistan, BOI Board . Viewed at: https://invest.gov.pk/boi -board -members . 
81 An April 2020 amendment to the Companies Act permitted all companies (not just public and listed 
companies) to buy back their shares if they maintain a debt/eq uity ratio of 3:1. The authorities indicate that 
the amendment in the Companies Act 2017 promulgated via Ordinance No. V of 2020, which was published in 
the Gazette of Pakistan  on 5 May 2020, lapsed after the expiry of the period provided in the Constituti on. 
Further amendments in the Companies Act 2017 have allowed all companies to have enabling power for 
buy-back of their shares. Recently, an amendment bill was being discussed at the Standing Committee of the 
Senate and further legislative approvals would  be completed in due course. Economist Intelligence Unit (2020), 
Country Commerce – Pakistan , October; and ABS & Co. (2021 ), Snapshot: Foreign Investment Law and Policy 
in Pakistan , 28 January. Viewed at: https://www.lexology.com/library/detail.aspx?g=8b0e1763 -ecdf-48a4-
9667-18eeb3d915c9 . 
82 Invest Pakistan. Viewed at: https://invest.gov.pk /investment -regime#gallery -7. 
83 Regarding construction, as per Pakistan Engineering Council requirements, a foreign firm would be 
considered for registration if fully owned by one or more foreign nationals having minimum 51% shares and 
registered with the SECP and having minimum 70% of its engineering staff from Pakistan. A foreign firm 
should have to enter into a joint venture with a Pakistani firm of an appropriate category and submit the same 
to the employer before participating in bidding. All engineeri ng works valued above PKR 4 million remain 
regulated through SRO 568(I)/87 of 8  July 1987, and the firms undertaking works above this ceiling are bound 
to meet the eligibility criteria as mentioned in this SRO. Concerning media, a licence should not be gra nted to: 
(i) a person who is not a citizen of Pakistan or resident in Pakistan; (ii) a foreign company organized under the WT/TPR/S/424 • Pakistan  
 
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  the exception to the 60% threshold is for corporate agriculture farming, where 100% ownership is 
allowed. Small -scale mining valued at less than PKR 300 mill ion (approximately USD  1.8 million) is 
restricted to domestic investors.84 Foreign investors in the services sector may retain 100% equity, 
subject to obtaining permission (i.e. a "no objection" certificate or licence) from the concerned 
agency and fulfill ing the requirements of any applicable sectoral policy. A licence for the 
establishment and operation of broadcast media or a distribution service is not granted to a company 
with the majority of shares owned or controlled by foreign nationals or companies  whose 
management or control is vested in foreign nationals or companies. In the education, health, and 
infrastructure sectors, 100% foreign ownership is allowed.  
2.4.4   Registration and approval  
2.55.   Pakistan maintains an open -admission system that does not require p re-screening and 
approval for entrants. However, foreign companies must fulfil the conditions of corporate registration 
under the Companies Act 2017 (Section 2.4.2). Those in compliance with the Companies Ordinance 
1984 and Pakistan's laws do not require a ny separate approvals for their investments except for 
certain banking, finance, and insurance sectors as regulated by the Securities and Exchange 
Commission of Pakistan ( SECP)  and State Bank of Pakistan. No project was rejected during the 
review period.  New investors must register their companies with the former and inform the latter to 
remit profits and royalties abroad.85 Permission for opening of branches of foreign banks continue 
to be granted by the State Bank of Pakistan. The establishment of a forei gn company liaison/branch 
office in Pakistan requires BoI approval; upon obtaining such approval from the BoI, the foreign 
company applicant may register in the SECP. A ll foreign investment must be cleared by the Ministry 
of Interior.  
2.56.   During the review per iod, in cooperation with the World Bank, the authorities simplified 
pre-registration and registration facilities and automated land records to simplify property 
registration, eased requirements for obtaining construction permits and utilities, introduced 
online/electronic tax payments, and facilitated cross -border trade by improving electronic 
submissions and processing of trade documents.86 Under the PRMI (Section 2.2.3), the 
establishment of an online one -stop shop called the Pakistan Business Portal is e nvisaged and 
30 June 2023 is set as the deadline for its launch.  
2.4.5   Investment promotion  
2.57.   Pakistan continued to promote investment, through the same tax and non -tax incentives 
available to both domestic and foreign investors (Table 2.4, Section 3.3.1.2).87 They continue to 
consist of reduced customs duties on imports of plant machinery and equipment; tax relief in the 
form of an initial depreciation allowance on plant, machinery, and equipment; and SEZs and 
export -oriented unit (EOU) facilities as well as secto r-specific measures including Export 
Enhancement Packages (EEPs).  
Table 2.4 Basic investment incentives, 2022  
Policy parameters  Manufacturing 
sector  Non-manufacturing sectors  
Agriculture  Infrastructure 
and social  Services including 
IT and telecom  
Government permission  Not required except 
for specified 
industriesa Not required except specific licences from concerned 
agencies  
Remittance of capital, profits, 
dividends, etc.  Allowed  Allowed  Allowed  Allowed  
Upper limit of foreign equity 
allowed  100%  100%b 
60:40c 100%  100%  
49%d 
 
laws of any foreign government; (iii) a company the majority of whose shares are owned or controlled by 
foreign nationals or companie s whose management or control is vested in foreign nationals or companies; or 
(iv) any person funded or sponsored by a foreign government or organization.  
84 United  States Trade Representative (2021), 2021 National Trade Estimate Report on Foreign Trade 
Barriers, 3 March. Viewed at: https://ustr.gov/sites/default/files/files/reports/2021/2021NTE.pdf . 
85 Economist Intelligence Unit (2020), Country Commerce – Pakistan , October.  
86 U.S. Department of State, 2020 Investment Climate Statements: Pakistan . Viewed at: 
https://www.state.gov/reports/2020 -investment -climate -statements/pakistan/ . 
87 U.S. Department of State, 2020 Investment Climate Statements: Pakistan . Viewed at: 
https://www.state.gov/reports/2020 -investment -climate -statements/pakistan/ . WT/TPR/S/424 • Pakistan  
 
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  Policy parameters  Manufacturing 
sector  Non-manufacturing sectors  
Agriculture  Infrastructure 
and social  Services including 
IT and telecom  
Customs duty on import of 
PME 0% Zero, 2%, 
5% Zero, 3%, 5%  0-5% 
Tax relief (IDA, % of PME 
cost) 25% 25% 25% 25% 
Royalty and technical fee  No restriction for 
payment of royalty 
and technical fee  Allowed as per guidelines of State Bank of Pakistan  
PME Plant, machinery, and equipment.  
IDA Initial depreciation allowance.  
a The specified industries are arms and ammunitions, high explosives, radioactive substances, security 
printing, and currency and mint. No new unit for the manufacturing of alcohol is authorized, except 
for industrial alcohol.  
b For corporate agriculture farming (CAF) only.  
c Other than CAF (60% to foreigners).  
d Financial business and airlines.  
Source:  Board of Investment. Viewed at: https://invest.gov.pk/investment -regime . 
2.58.   During the review period, SEZs remained the bedrock of the investment strategy. Their  
regulatory framework was updated with the 2016 amendment of SEZ Act 2012, the Sole Enterprise 
Special Economic Zone Regulations 2020 for the establishment of single unit SEZs in Pakistan under 
the provisions of the SEZ Act 2012 (11  December  2020), and the  SEZ Zone Enterprise Admission 
Regulations 2021 (SRO 329(I)/2021, 15  January  2021).88 The Sole Enterprise Special Economic 
Zone Regulations 2020 provided clarity on procedural guidelines and proposed certain parameters 
to safeguard the socioeconomic intere sts of the country; furthermore, they provide access for 
establishment of single unit SEZ passage to serious investors only, while relaxing these parameters 
to induce industrialization in 67 underdeveloped areas and to support import substitution of the 
top 5 importing sectors.89 The SEZ Zone Enterprise Admission and Sale and lease and sub -lease of 
Plot Regulations 2021 aim at streamlining the sale/lease of the industrial plots in the SEZs to the 
prospective zone enterprises to ensure transparency and a lev el playing field, through use of an 
IT-enabled solution – the Special Economic Zone Management System (SEZMIS) Module (see 
below). SEZs are developed by the federal and provincial governments or in collaboration with the 
private sector as public -private pa rtnerships; the private sector may establish a SEZ on its own. The 
BoI ensures o ne-window facilities for SEZ investors. The SEZ tax incentive package for zone 
developers, co -developers, and zone enterprises are an exemption from income tax for 10  years and  
a one -time exemption from all customs duties and taxes on import of capital goods.90 Facilities 
provided by SEZs include access to high -quality infrastructure, uninterrupted power supply, clearly 
titled land, streamlined regulatory enforcement, simpler ru les for establishing a business, and 
expedited customs procedures. A SEZMIS Module was launched on 14  June 2021 to act as a 
one-window portal for SEZs for bringing transparency and timely results by helping overseas 
investors submit their zone enterprise e ntry applications so they are automatically shared with the 
relevant authorities. The module is effectively a leap into the digital future of SEZ -led 
industrialization, while the regulations provide the legal guidelines for its operation. As of 
August  2021, 22 designated SEZs, including 4 CPEC -prioritized SEZs (Rashakai, Khyber 
Pakhtunkhwa (KP); Faisalabad, Punjab; Bostan, Balochistan; and Dhabeji, Sindh) (Section 2.3.2.3),  
3 Private SEZs (including 2 Sole Enterprises SEZs, and a Science and Technology Park  in Islamabad), 
were in place and  at various stages of development. To fast -track development of CPEC SEZs, the 
Federal Government has ensured provision of utilities to the designated zero -point of these SEZs. 
Between 5  April 2015 and 31  May 2021, over 84%  of industrial area was allotted to 285 enterprises, 
46% of investment had been realized with 50% as FDI, and the Federal Government had exempted 
PKR 49.39 billion of custom duties and taxes on the import of plant and machinery for the setting -up 
of units in these zones.91 Despite substantial benefits to reduce the cost of doing business, reportedly 
SEZs have faced difficulties in attracting sufficient investment due to lack of basic infrastructure and 
 
88 Invest Pakistan, SEZ Act . Viewed at: https://invest.gov.pk/sez#gallery -23; and The Gazette of 
Pakistan, 29  March  2021. Viewed at: https://invest.gov.pk/sez#gallery -29. 
89 As of October 2021, two such Sole Enterprise  SEZs had been notified under these regulations and 
both were located in backward areas.  
90 Invest Pakistan, Incentives in Special Economic Zones . Viewed at: https://invest.gov.pk/sez#gallery -
1. 
91 Finance Division (2021), Pakistan Economic Survey 2020 -21: Annex III: Special Economic Zones . 
Viewed at: http://www.finance.gov.pk/survey/chapters_21/Annex%20III%20SEZones. pdf. WT/TPR/S/424 • Pakistan  
 
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  none is fully developed, while the CPEC SEZs are at nascent stages of development.92 Efforts are 
under way for more funding and use of other innovative mod els, such as captive power to cut the 
costs and release the burden of such allocation.  
2.59.   Special incentives for EOUs (Section 3.2.4), a stand -alone industrial entity operating 
anywhere in the country and exporting 100% of its production, remain available to foreign investors 
and local investors.93 They include customs duty and tax exemptions for imported and local purchase 
of raw materials required for the manufacture of export goods, as well as plant machinery, 
equipment, apparatus, and capital goods used so lely in the manufacture of goods for export, and 
the duty -free import of vehicles.94 
2.60.   Sectoral incentives introduced through the 2015 -18 STPF (Section 2.2.2) and EEPs are 
seemingly in place.95 These incentives are largely industry -specific and include tax breaks, tax 
refunds, tariff reductions, the provision of dedicated infrastructure, and investor facilitation services. 
In 2019, EEPs encouraged non -traditional exports such as transport equipm ent, auto parts and 
accessories, machinery, furniture, and stationery.96 As at August 2021, incentives had been or were 
about to be provided under the Automotive Development Policy (ADP 2016 -21), Electric Vehicle 
Policy 2020 -2025 2 -3 Wheelers & Heavy Comme rcial Vehicles (approved by the ECC on 
10 June 2020), and the Mobile Device Manufacturing Policy 2020 to, inter alia,  meet import 
substitution, export enhancement, and job creation objectives (Sections 3.3.1. and 4.4).  
2.4.6   Dispute settlement  
2.61.   Pakistan, a member  of the International Centre for the Settlement of Investment Disputes 
(ICSID), ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 
(1958 New York Convention) in 2011 under its Recognition and Enforcement (Arbitration Agre ements 
and Foreign Arbitral Awards) Act. Since 2011, Pakistan has maintained mechanisms for recognition 
and enforcement of international arbitral awards.97 According to the authorities, there is no case in 
which the courts in Pakistan have refused to grant  recognition to a foreign arbitral award; during 
the review period, out of 12 cases, 11 were settled and 1 is still ongoing. Its judicial system also 
allows for specialized tribunals as a means of alternative dispute resolution, which are enabled to 
addres s taxation, banking, labour, and IPR enforcement disputes.  
2.4.7   Investment treaty developments  
2.62.   Pakistan has signed 53 bilateral investment treaties ( BITs) with 48 economic entities, of which 
32 are in force; no new BITs were signed during the review period.98 As at March 2021, Pakistan 
 
92 Finance Division (2021), Pakistan Economic Survey 2020 -21: Annex III: Special Economic Zones . 
Viewed at: http://www.finance.gov.pk/survey/chapters_21/Annex%20III% 20SEZones.pdf ; and U.S. 
Department of State, 2020 Investment Climate Statements: Pakistan . Viewed at: 
https://www.state.gov/reports/2020 -investment -climate -statement s/pakistan/ . 
93 More specifically, the unit is required to export at least 60% of its annual production abroad, 20% 
indirect export against securities or on payment of duty/taxes, and the remaining 20% can also be sold in the 
local market on payment of duty  taxes. Pakistan Customs Trade Facilitation Enquiry Point, Export Oriented 
Unit. Viewed at: http://www.customsenquiry.gov.pk/export_oriented_unit.html ; and Federal Board of 
Revenue,  Export Facilitation Schemes . Viewed at: https://www.fbr.gov.pk/export -facilitaion -
schemes/51149/132200 . 
94 U.S. Department of State, 2020 Investment Climate Statements: Pakistan . Viewed at: 
https://www.state.gov/reports/2020 -investment -climate -statements/pakistan/ . 
95 U.S. Department of State, 2020 Investment Climate Statements: Pakistan . Viewed at: 
https://www.state.gov/reports/2020 -investment -climate -statements/pakistan/ . 
96 The Express Tribune  (2019), "Govt Extends Export Package by 3 Year s", 9 August. Viewed at: 
https://tribune.com.pk/story/2031342/govt -extends -export -package -3-years . 
97 Pakistan has enacted two pieces of legislation to recognize and en force foreign arbitral awards: the 
Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act 2011 dealing with 
recognition and enforcement of Awards under the New York Convention; and the Arbitration (International 
Investment Dis putes) Act 2011 dealing with recognition and enforcement of awards rendered by ICSID 
Tribunals.  
98 The BITs' signatories are Australia, the Kingdom of Bahrain, Bosnia and Herzegovina, China, 
Denmark, France, Germany, Indonesia, the Islamic Republic of Iran,  Japan, Kazakhstan, the Republic of Korea, 
Lebanon, Mauritius, Romania, Singapore, Sri  Lanka, Sweden, Switzerland, Tajikistan, Turkey, the United Arab 
Emirates, the United Kingdom, Uzbekistan, Italy, Portugal, Spain, the Netherlands, Belgium –Luxembourg 
Economic Union (BLEU), Lao People's Democratic Republic, Oman, Syria, the State of Kuwait, Cambodia, 
Bulgaria, Morocco, Malaysia, Egypt, Yemen, Czech  Republic, the Philippines, Qatar, Belarus, Tunisia, WT/TPR/S/424 • Pakistan  
 
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  has reportedly decided to scrap most of its existing BITs as they are shrinking the policy space for 
adopting measures of public interest while attracting international litigation.99 According to a study, 
the state of play of all Pakistan's BITs is as follows: the BIT with Indonesia was unilaterally 
terminated by Indonesia in 2016; 16 BITs are signed and ineffective due to non -ratification; 23 BITs 
are ratified having completed the initial duration of 10, 15, or 20 years and can be  terminated by 
giving notice of prescribed duration; and the remaining 9 ratified BITs cannot be unilaterally 
terminated at present. To deal with the existing stock of BITs and to draw a roadmap for future 
BITs, it appears that the BoI prepared a strategy for reforming existing and future BITs. Reportedly, 
in July 2021, the Prime Minister approved a new BIT template whereby any dispute would be 
remedied through local arbitration.100 All new BITs will be negotiated on the new template, whereas 
the existing ra tified BITs will be reformed in consultation with the relevant BIT partners.  
2.63.   Pakistan maintains 66 Avoidance of Double Taxation Treaties (DTTs), of which 3 (Bulgaria; 
Hong Kong, China; and Switzerland) were concluded during the review period.101 In 2016, Pa kistan 
signed the amended Protocol of the OECD's Multilateral Convention on Mutual Administrative 
Assistance in Tax Matters.102 The Convention, which entered in force on 1  April 2017 for Pakistan, 
would help the country exchange banking details with the oth er 140 (as of 15  July 2021) 
participating jurisdictions to locate untaxed money in foreign banks. Pakistan is a member of the 
Base Erosion and Profit Shifting (BEPS) framework, allowing for the automatic exchange of 
country -by-country reporting as required  by the BEPS package. Furthermore, Pakistan signed on 
7 June 2017 and ratified on 18  December  2020 the OECD's Multilateral Convention to Implement 
Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) that entered in force 
on 1 April 2021.103 As a result, same as the BITs, the MLI will bring about important changes to the 
DTTs covered by the MLI, including a new preamble and anti -treaty abuse measures, as well as 
more stringent rules on dividends, capital gains, and definition of perm anent establishment. The MLI 
is to improve dispute resolution and provide for corresponding adjustments in case of transfer pricing 
primary adjustments, therefore easing compliance burden.  
2.64.   Pakistan is also a member of the Multilateral Investment Guarantee Agency (MIGA).  
 
Bangladesh, Azerbaijan, the Kyrgyz  Republic, and Turkmeni stan. Invest Pakistan, Bilateral Investment Treaty 
(BITs) . Viewed at: https://invest.gov.pk/investment -regime/bits . 
99 Business Recorder  (2021), "Most of BITs to be Scrapped", 25  March. Viewed at:  
https://www.bilaterals.org/?most -of-bits-to-be-scrapped . 
100 Dawn  (2021), "Imran Okays New Bilateral Investment Treaty Template", 12  July. Viewed at: 
https://www.bilaterals.org/?imran -okays -new-bilateral . 
101 The DTTs' signatories are Bulgaria; Hong Kong, China; Brunei  Darussalam; Czech  Republic; Nepal; 
the Kyrgyz  Republic; Ukraine; Spain; Serbia; Yemen; Viet  Nam; the Un ited States; Uzbekistan; the 
United  Arab Emirates; the United Kingdom; Turkmenistan; Tunisia; Turkey; Tajikistan; Thailand; the 
Kingdom  of Saudi Arabia; Syria; Switzerland; Sweden; Sri Lanka; South  Africa; Singapore; Romania; Qatar; 
Portugal; Poland; the P hilippines; Oman; Norway; Nigeria; the Netherlands; Morocco; Mauritius; Malta; 
Malaysia; Lebanon; Libya; the Republic of Korea; Kazakhstan; the State of Kuwait; Jordan; Japan; Italy; 
Ireland; the Islamic Republic of Iran; Indonesia; Hungary; Germany; Franc e; Finland; Egypt; Denmark; China; 
Canada; Bosnia and Herzegovina; Belarus; Belgium; Bangladesh; the Kingdom of Bahrain; Azerbaijan; and 
Austria. Federal Board of Revenue, Full Scope Treaties . Viewed at: https://www.fbr.gov.pk/Categ/bilateral -full-
scope -treaties/332 . 
102 Federal Board of Revenue, Pakistan Signs the Multilateral Convention on Mutual Administrative 
Assistance in Tax Matters . Viewed at: https://fbr.gov.pk/Events/pakistan -signs-the-multilateral -convention -
on/131501 ; OECD, Jurisdictions Participating in the Convention on Mutual Administrative Assistance in Tax 
Matters: Status – 20 September  2021. Viewed at: https://www.oecd.org/ctp/exchange -of-tax-
information/Status_of_convention.pdf ; and U.S. Department of State, 2020 Investment Climat e Statements: 
Pakistan . Viewed at: https://www.state.gov/reports/2020 -investment -climate -statements/pakistan/ . 
103 Federal Government Notification/SRO 405(I)/2021, 1  April 2021. Viewed at: 
https://download1.fbr.gov.pk/SROs/202142164212305MLIFATE.pdf ; and PwC (2021), Impact of Pakistan's 
Notification for Entry into Force of OECD's Multilateral Convention to Implement Tax Treaty Related Measures 
to Prevent BEPS , 9 April. Viewed at: https://www.pwc.com.pk/en/ass ets/document/AFFNoteonMLI -
9April2021.pdf . WT/TPR/S/424 • Pakistan  
 
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  3  TRADE POLICIES AND PRACTICES BY MEASURE  
3.1.  Since its previous Review in 2015, Pakistan has made significant improvements to its customs 
clearance procedures. These have included the roll -out of new modules in Web -Based One Customs 
(WeBOC), such as those dealing with risk assessment, e -payments, advance ruling, pre -clearance, 
and the authorized econom ic operator (AEO) programme. Additionally, Pakistan is also in the process 
of implementing a national single window platform. These initiatives have enabled Pakistan to 
implement more than 86% of the provisions of the Agreement on Trade Facilitation and re duce 
customs clearance times.  
3.2.  During the review period, Pakistan's overall average applied MFN tariff and the number of tariff 
rates decreased due to the abolition of nuisance rates and the introduction of duty -free rates that 
apply to nearly 30% of the ta riff lines. However, despite the above, Pakistan's tariff regime remains 
complex. The large amount of water between applied and bound rates provides the authorities with 
considerable scope to alter tariffs. The complexity of the tariff and tax regime is fu rther compounded 
by the prevalence of Statutory Regulatory Orders (SROs), which are statutory instruments/directives 
of delegated legislation in the form of Notifications issued by ministries and departments to alter on 
an ad hoc basis the existing regulatory and fiscal framework (Section 2.2.3).  
3.3.  The review period also saw changes in Pakistan's contingency measures regime, with the 
enactment of the Anti -Dumping Duties Act, 2015.  
3.4.  Export procedures have also been streamlined and mad e more efficient through the 
implementation of different modules under the WeBOC portal.  
3.5.  Certain exports incur a regulatory duty; export of certain products deemed essential is 
prohibited so as to ensure adequate domestic supply. Additionally, the export o f some products is 
restricted, and these products can be exported only if certain conditions are met. An export 
development surcharge of 0.25% of the f.o.b. value has been levied on all exports to finance the 
Export Development Fund (EDF).  
3.6.  Pakistan continu es to operate several schemes to support its export sector, including the Export 
Processing Zones (EPZ) Scheme, the Manufacturing Bond Scheme (MB), the Duty and Tax Remission 
for Export Scheme (DTRE), the Export Oriented Units and Small and Medium Enterpri se Scheme 
(EOU), and the recently introduced Export Facilitation Scheme (EFS). Incentives offered under each 
scheme vary from tax and duty rebates to duty -free imports of inputs and plant and machinery to 
subsidized utility rates. Additionally, preferentia l export finance schemes are also operational.  
3.7.  Tax administration in Pakistan remains hampered by a multiplicity of taxes, numerous 
concessions and exemptions, cumbersome procedures, and the large informal sector. To address 
these issues the authorities in troduced a comprehensive tax reform package as part of the 
FY2021/22 Budget.  
3.8.  Pakistan continues to operate several incentive schemes that are both general in nature as well 
as sector -specific. Sector -specific incentives are provided to the following sector s: electric vehicle 
manufacturing, information technology, manufacturing of mobile devices, automobile, 
pharmaceutical, food processing, housing and construction, logistics, textiles, and tourism.  
3.9.  Pakistan's TBT regime remained unchanged during the review period; most of its standards are 
internationally adopted . 
3.10.   The main change with respect to plant protection and quarantine was the promulgation of the 
Pakistan Plant Quarantine Rules 2019; maximum residue limits requirements apply to both imported 
and dome stic foodstuffs. No uniform labelling and marking system is in place.  
3.11.   State -owned enterprises (SOEs) have been incurring considerable losses and remain a 
significant burden on the Government's finances and resource allocation; during the review period, 
a comprehensive review of existing SOEs was undertaken and privatization of some of them is under 
way. Pakistan became an observer to the WTO plurilateral Agreement on Government Procurement 
in February 2015 and regulatory changes during the review period inc luded coverage of the WT/TPR/S/424 • Pakistan  
 
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  disposal/sale of public assets, allowing direct contracting by SOEs and accommodating 
e-procurement methods. Price preferences depending on domestic value -added content are in place.  
3.12.   Intellectual property rights (IPRs) protection was strengthened by signing and ratifying the 
Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks, and 
legal and institutional initiatives in geographical indications. During the review period, Pakistan took 
several ste ps to improve IPR enforcement. The legal framework on competition policy remains 
unchanged. New regulations were issued with a view to curbing inflation and ensuring the supply of 
essential commodities at affordable prices.  
3.1  Measures Directly Affecting Impo rts 
3.1.1   Customs procedures, valuation, and requirements  
3.13.   Imports are governed by the Customs Act 1969, Customs Rules 2001, the Export and Import 
Policy Act 1951 and the associated rules, and the Import Policy Order 2020. Under the legislation, 
importers are req uired to have a national tax number and a sales tax registration number. Other 
documents required include the shipping invoice, the packing list, the bill of lading, a copy of the 
letter of credit or contract, a copy of the most recent sales tax return, an d any certificates of origin 
and SPS documents that may be needed.  
3.14.   Once the shipment arrives at the customs port, the port authorities issue the import general 
manifest (serial number of the import), which is used to generate the import goods declaration. The 
importer need to submit the goods declaration and the accompanying documents into the WeBOC 
system.1 Customs duty and taxes are paid on a self -assessed basis.  
3.15.   The risk assessment module in WeBOC marks the goods declaration based on certain risk 
parame ters to the green, yellow, or red channels. Currently, 55%, 24%, and 21% pass through the 
green, yellow, and red channels, respectively.2 
3.16.   According to the authorities, Pakistan has implemented over 86% of the provisions of the 
WTO Agreement on Trade Facil itation (Section 2.3.1.1). In this respect, recent changes have 
included the rolling -out of 32 new modules in the WeBOC system. In 2018, Customs launched the 
e-payment module, which allows for electronic payment of duties and taxes on imports online 
throug h commercial banks' web applications. As a result, e -payments rose from 22% in 2018 to 
nearly 50% in January 2020.  
3.17.   Pakistan launched an AEO programme in October 2020, and currently there are three AEOs 
operating, while the registration of six additional AE Os is in process. Additionally, an advance ruling 
system was also implemented in  November 2020, as was the pre -clearance of imports through air 
cargo in February 2021. It is envisaged that pre -clearance would also be available for sea cargo.  
3.18.   In addition to  enhancing the risk management system in WeBOC, Pakistan Customs has 
launched a container scanning system, which is expected to reduce clearance times as well as the 
cost of doing business.  
3.19.   With a view to improving trade facilitation and simplifying custom s procedures, Pakistan 
Customs is in the process of developing a single window platform, where the trader would be able 
to interact with 72 government regulators and other related agencies. In this regard, the Pakistan 
Single Window Act 2021 was passed by the national assembly, and a pilot version called Pakistan 
Single Window -Lite is expected to be rolled out in March 2022.  
 
1 WeBOC is an indigenously developed computerized clearance system providing end -to-end automated 
customs clearance of import and export of goods. WeB OC was piloted in 2011 and rolled out across the country  
in 2015 . According to the authorities, WeBOC is utilized by around 100,000 registered users and covers 
approximately 97% of Pakistan's trade.  
2 Federal Board of Revenue, Register for Customs . Viewed at: https://www.fbr.gov.pk/categ/register -
customs/51149/70849/%20131192 . WT/TPR/S/424 • Pakistan  
 
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  Customs valuation  
3.20.   It would appear that Pakistan applies the provisions of the WTO Agreement on Customs 
Valuation and has transposed th is into domestic law (Section 25 of the Customs Act 1969 and 
Chapter IX of Customs Rules 2001).3 As such, the value of imported goods is determined according 
to the following rules:  
a) In the first instance, the customs value of imported goods is the transaction value.  
b) If the customs value of the imported goods cannot be determined according to (a), the n 
it shall be the transaction value of identical goods.  
c) If the value cannot be determined according to either (a) or (b), then it shall be the 
transaction value of similar goods.  
d) If it cannot be determined under any of the above provisions, then a deductiv e method 
would be used.  
e) A computed method would be used to determine the price of the imported goods if the 
value cannot be determined according to (a), (b), (c), or (d).  
f) Lastly, if the value cannot be ascertained according to any of the above methods, th en 
a fall-back method is used. The Law states that, " if the computed value of the imported 
goods cannot be determined under sub -section (4), the value shall be determined using 
reasonable means consistent with the principles and general provisions containe d in 
section 25 and on the basis of data available with the Controller of Customs Valuation, 
due regard being given to the circumstances surrounding the sale".4 
3.21.   However, Section 25A of the Customs Act 196 9 states that "the Collector of Customs on his 
own motion, or the Director of Customs Valuation on a reference made to him by any person, may 
determine the customs value of any goods or category of goods imported into or exported out of 
Pakistan after following the scheme and sequential order as laid down under section 25. The customs 
value determined shall be the applicable customs value for assessment of the relevant imported or 
exported goods. In case of any conflict in the customs value determined, the Director -General of 
Customs Valuation shall determi ne the applicable customs value", which can be appealed further to 
Member Customs (Policy).  
3.22.   Administrative appeals against Customs valuations need to be made within 30 days to the 
Director -General of Customs Valuation . Decisions of the Director -General of Customs Valuation can  
be appealed to Member Customs (Policy); the Special Court for C ustoms, Taxation and 
Anti-Smuggling; and subsequently to the Appellate Tribunal on Customs, Excise and Sales Tax; the 
provincial High Court; and, in ce rtain situations, the Supreme Court.  
Pre-shipment inspection  
3.23.   Pre-shipment requirements are in place for a number of second -hand goods (e.g. plant, 
machinery, equipment, and apparatus) by an authorized agency to certify age and workability. These 
are in pla ce mainly for health and safety reasons.  
3.1.2   Rules of origin  
3.24.   Pakistan has notified the WTO that it has no MFN rules of origin.5 
 
3 Pakistan has not made any notification to the WTO to this effect nor has it replied to the Checklist of 
issues in the Committee on Customs Valuation. However, th e authorities state that a notification to this effect 
was being prepared.  
4 Customs Act 1969.  
5 WTO document G/RO/N/16, 5  March  1997.  WT/TPR/S/424 • Pakistan  
 
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  3.25.   Preferential rules of origin are in place under bilateral/plurilateral trade agreements and 
unilateral schemes (Table 3.1, Section 2.3.2). These include various value addition and change in 
tariff classification criteria, and also provide for product -specific rules.  
Table 3.1 Preferential rules of origin in trade agreements, 2020  
Trade ag reement  Wholly 
produced or 
obtained  Minimum value 
addition  Cumulation rules  Product -
specific rules  
South Asian Free Trade 
Area (SAFTA)  Yesa 40% of f.o.b.;  
30% for LDCs;  
35% for Sri Lankab Minimum aggregate 
originating content of 50% 
f.o.b.c Yesd 
Pakistan -Sri Lanka FTA  Yesa 35% of f.o.b.e Minimum value addition of 
25% in exporting countryf None 
Pakistan -China FTA  Yesg 40% of f.o.b.  Minimum value addition of 
25% in exporting countryh None 
Pakistan -Malaysia PTA  Yesg 40% of f.o.b.  Minimum value addition of 
25% in exporting countryh Certain textiles 
and jewelleryi 
Pakistan -Islamic Republic 
of Iran PTA  Yes 50% of f.o.b.   .. None 
Pakistan -Mauritius PTA  Yes 35% of f.o.b.  Minimum value addition of 
25% in exporting countryh None 
Global System of Trade 
Preferences  Yesa 50% of f.o.b.;  
40% for LDCse Minimum total value 
addition of 60%; 50% for 
LDCs None 
Pakistan –Indonesia PTA  Yes 40% of f.o.b.  Minimum value addition in 
two countries of 40%  None 
LDCs Least developed countries.  
.. Not available.  
a Fish caught in high seas must be in vessels registered in a member country and operated by its 
citizens or an entity with domestic equity (including state) of 65%, or 75% equity of all members.  
b Final good must be classified in a different tariff heading (4 -digit HS) than all non -originating 
materi al inputs.  
c Also, must be minimum domestic value content (value of inputs originating in the exporting member 
plus domestic value addition in the exporting member) of 20% of f.o.b. value and meet change in 
tariff classification requirements.  
d Generally r equire lower minimum value addition of mainly 30% or 40% and change in 6 -digit HS 
classification.  
e Final good must be in a different 6 -digit tariff classification than all non -originating material inputs.  
f Minimum total value addition in two countries of  35%.  
g Fish caught in high seas must be in vessels registered in a member or entitled to fly its flag.  
h Minimum value addition in two countries of 40%.  
i Based on change in 4 -digit tariff classification (spinning, weaving, bleaching, dyeing, printing and  
finishing sufficient transformation to be originating goods).  
Source:  Compiled by the WTO Secretariat.  
3.1.3   Tariffs  
3.1.3.1   Tariff structure  
3.26.   In 2021/22, the applied MFN tariff in Pakistan consisted of 13  different  ad valorem rates  (0%, 
3%, 11%, 16%, 20%, 30%, 35%, 50%, 55%, 60%, 75%, 90%, and 100%) and 20 different specific 
rates. This is a small change from the 15 ad valorem  rates (1%, 5%, 10%, 15%, 20%, 25%, 30%, 
35%, 50%, 55%, 60%, 65%, 75%, 90%, and 100%) and 17 different speci fic rates in 2014/15, 
making the tariff slightly less complex; however, there is considerable scope to reduce the number 
of bands and hence simplify the tariff further.6 Nearly all tariffs are applied on an ad valorem  basis, 
with just 48 tariff lines bein g subject to specific rates (compared with 47 in 2014/15).  
3.27.   The 2021/22 tariff, which is based on HS2017 nomenclature, comprises 7,370 lines at the 
8-digit level, an increase from 7,018 lines in 2014/15, which were based on the HS12 nomenclature 
also at the  8-digit level (Table 3.2). The change in the number of lines is due to the change in 
nomenclature as well as the creation of national -level HS codes.  
 
6 Rates in excess of 50% in 2021/22 are at 55%, 60%, 75%, 90% , and 100% , compared with 55%, 
60%, 65%, 75%, 90% , and 100% in 2014/15.  WT/TPR/S/424 • Pakistan  
 
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  Table 3.2 Tariff structure of Pakistan, 2014/15 and 2021/2 2 
(%, unless otherwise indicated)   
MFN applied  Final 
bounda   2014/15  2021/22  
Bound tariff lines (% of all tariff lines)  97.9 97.0 97.0 
Simple average rate  14.3 12.1 (12.0)  61.5 
HS Chapters 01 -24 14.4 14.1 (14.0)  91.6 
HS Chapters 25 -97 14.3 11.7 56.5 
WTO agricultural products  14.6 13.2 (13.0)  96.3 
WTO non -agricultural products  14.3 11.9 56.8 
Duty-free tariff lines (% of all tariff lines)  0.0 28.9 0.0 
Simple average of dutiable lines only  14.3 17.0 61.5 
Tariff quotas (% of all tariff lines)  0.0 0.0 0.0 
Non-ad valorem  tariffs (% of all tariff lines)  0.7 0.7 0.0 
Domestic tariff "peaks" (% of all tariff lines)b 1.3 2.0 0.01 
International tariff "peaks" (% of all tariff lines)c 38.7 43.1 94.1 
Coefficient of variation  0.8 1.1 0.4 
Nuisance applied rates (% of all tariff lines)d 6.3 0.0 (0.1)  0.0 
Total number of tariff lines  7,018  7,370  7,370  
Duty-free rates  0 2,128  0 
Ad valorem  rates (>0%)  6,971  5,194  7,147  
Specific rates  47 48 0 
Unbound  n.a. n.a. 223 
n.a. Not applicable.  
a Bound rates are based on the 2021/22 tariff schedule. Calculations are based o n 7,147 bound tariff 
lines, including 18 partially bound tariff lines. The latest certified bound schedule is in HS12 
nomenclature. A comparison to the 2020/21 tari ff schedule is done to the best possible extent.  
b Domestic tariff peaks are defined as those exceeding three times the overall simple average applied 
rate. 
c International tariff peaks are defined as those exceeding 15%.  
d Nuisance rates are those greater  than zero, but less than or equal to 2%.  
Note:  The 2014/15 and 2021/22 tariffs are, respectively, based on the HS12 and HS17 nomenclature. 
Calculations are based on national tariff line level (8 -digit).  Figures in brackets include ad valorem  
equivalents (AVEs) for specific rates, as available. In 2021/22, of 48 specific rates, 35 AVEs are 
calculated based on 2019/20 import data.  
Source:  WTO Secretariat calculations, based on data received by the authorities and Federal Board of 
Revenue. Viewe d at: https://www.fbr.gov.pk/categ/customs -tariff/51149/70853/131188 . 
3.1.3.2   Applied tariff  
3.28.   The simple average (unweighted) applied MFN tariff in 2021/22 was 12.1%, a significant 
decre ase from 14.3% in 2014/15. The decrease in the average rate came about due to the abolition 
of nuisance rates, which applied to 6.3% of tariff lines in 2014/157; additionally, the introduction of 
a duty -free band, which is applicable to nearly 29% of tari ff lines, also contributed to the reduction 
of the average applied rate. However, the applied rate could have dropped further had it not been 
for the splitting and increase of high tariff rates applied in the transport sector. As per the WTO 
definition, "t ransport equipment" tariff lines increased from 238 in 2014/15 to 331 in 2021/22, while 
the associated applied tariff increased from 34.4% to 39.4% over the same period. Over 93% of 
applied tariffs range from zero to 20%, while the modal or most common rat e is 20% (Chart  3.1). 
 
7 Nuisance rates are those greater than zero, but less than or equal to 2%.  WT/TPR/S/424 • Pakistan  
 
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  Chart 3.1 Distribution of MFN applied tariff rates, 2014/15 and 2021/22  
 
Note:  Figures next to the bars refer to the percentage of total lines.  
Source:  WTO Secretariat calculations, bas ed on data provided by the authorities and Federal Bureau of 
Revenue. Viewed at: https://www.fbr.gov.pk/categ/customs -tariff/51149/70853/131188 . 
3.29.   Duty-free rates mainly apply to, inter alia,  chemicals and products thereof, machinery and 
electrical equipment, base metals and articles thereof, mineral products, and precision equipment. 
The highest ad valorem  rate of 100% applies to 31 tariff lines und er HS 8703 (motor vehicles), while 
the second -highest rate of 90% applies to 17 tariff lines corresponding to alcoholic beverages.  
3.30.   As mentioned, specific rates apply to 48 tariff lines: HS Chapter 14 (vegetable products 
n.e.s.  – betel leaves), 1 tariff lin e; HS Chapter 15 (vegetable oils), 37 tariff lines; HS Chapter 28 
(inorganic chemicals – sodium hydroxide, in aqueous solution), 1 tariff line; HS Chapter 37 
(cinematographic films), 2 tariff lines; HS Chapter 71 (precious metal – silver and gold), 5 tarif f 
lines; and HS Chapter 85 (electronic equip. – cellular mobile phones), 2 tariff lines. According to 
WTO Secretariat calculations, the highest AVE of 93.6% applies to betel nuts, while the second -
highest rate of 11.6% applies to palm oil.  
3.31.   As per WTO secto ral definitions, average applied MFN tariffs on agricultural products are 
higher than those on non -agricultural products. Since 2014/15, the average applied MFN tariff on 
agricultural products showed a decrease from 14.6% in 2014/15 to 13.2% in 2021/22. Th e average 
applied MFN tariff on non -agricultural products also declined from 14.3% to 11.7% over the same 
period (Chart 3.2). Zero rates apply to slightly over 6% of agricultural tariff lines and 32% of 
non-agricultural tariff lines (Table A3.1).  
(0.7%)(1.3…(3.8%)(0.4%)(20.7%)(12.5%)(7.1%)(14.2%)(33.1%)(6.3%))
0 500 1,000 1,500 2,000 2,500specific>50%35%30%25%20%15%10%5%1%
Note:  Figures next to the bars refer to the percentage of total lines.
Source:  WTO Secretariat calculations, based on data provided by the authorities and Federal Bureau of Revenue.  Viewed at:          
https://www.fbr.gov.pk/categ/customs -tariff/51149/70853/131188Number of tariff linesChart 3.[PAK]  Distribution of MFN applied tariff rates, 2014/15 and 2021/22
2014/15
(0.7%)(2.0%)(3.8%)(0.5%)(30.0%)(6.8%)(14.9%)(12.5%)(28.9%)
0 500 1,000 1,500 2,000 2,500 specific>50%35%30%20%16%11%3%Duty free
Number of tariff lines2021/22WT/TPR/S/424 • Pakistan  
 
- 62 - 
 
  Chart 3.2 Average applied MFN and bound tariff rates, by HS section, 2014/15 and 
2021/22  
 
Note:  Calculations for averages exclude specific rates. HS Sections 01, 04, 05, 06, 08, 10, and 17 are not 
fully bound. Final bound rates are based on the 2021/22 tariff schedule.  
Source:  WTO Secretariat calculations, based on data provided by the authorities and data taken from the 
Federal Board of Revenue.  
3.1.3.3   Tariff escalation and dispersion  
3.32.   According to the ISIC classificat ion, Pakistan's tariff displays mixed escalation, with the tariff 
rate on raw materials (first stage of processing) being 7.5%, while on intermediate goods it is 7.2%, 
rising again to about 15.7% for fully processed products. Chemicals , non-metallic minera l products , 
textiles and leather, and  other manufacturing show positive escalation, while food, beverages and 
tobacco,  paper printing and publishing,  and total manufacturing display mixed escalation 
(Chart  3.3). 
3.33.   Apart from the overall level of the tariff, as reflected in the average applied MFN tariff rate, 
there are potential efficiency losses depending on the dispersion of these tariff rates across product 
lines. The greater the differentials in tariff rates, especially within groups of similar and thus 
substitutable products, the higher the chance that consumer and producer decisions are distorted 
by the tariff structure. Since 2014/15, the proportion of tariff lines involving domestic peaks and 
international peaks have increased (Table  3.2). 
0%10%20%30%40%50%60%70%80%90%100%110%
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
Calculations for averages exclude specific rates.   HS Sections 01, 04, 05, 06, 08, 10 and 17 are not fully bound.  Final bou nd rates 
are based on the 2021/22 tariff schedule.
WTO Secretariat calculations, based on data provided by the authorities and data taken from the Federal Board of Revenue.Chart 3.2   Average applied MFN and bound tariff rates, by HS section, 2014/15 and 2021/22
Note:
Source:01   Live animals & products        
02   Vegetable products
03   Fats & oils      
04   Prepared food, etc.
05   Mineral products
06   Chemicals & products07   Plastic & rubber
08   Hides & skins
09   Wood & articles
10   Pulp, paper, etc.
11   Textiles & articles
12   Footwear, headgear13   Articles of stones
14   Precious stones, etc.
15   Base metals & products
16   Machinery
17   Transport equipment
18   Precision instruments19   Arms & ammunition
20   Miscellaneous manufacturing
21   Works of art, etc.Average applied rate 2014/15 and 2021/22 (14.3% 
and 12.1%, respectively)Average final bound rate
(61.5%)MFN 2014/15 MFN 2021/22 Final boundWT/TPR/S/424 • Pakistan  
 
- 63 - 
 
  Chart 3.3 Tariff escalation by 2 -digit ISIC industry, 2014/15 and 2021/22  
 
n.a.  Not applicable.  
Note:  Excluding specific rates.  
Source:  WTO Secretariat calculations, based on data provided by the authorities and data ta ken from the 
Federal Board of Revenue.  
3.1.3.4   Tariff bindings  
3.34.   Pakistan's latest certified bound schedule is in HS12. However, for the purposes of this Review, 
a comparison with the 2021/22 tariff, which is based on HS17 nomenclature is done to the best 
possible e xtent. The authorities state that HS17 transposition of bound rates is in process.  
3.35.   Pakistan has bound 97% of its tariff at the HS 8 -digit level (7,129 lines are fully bound, and 
18 lines are partially bound). Unbound lines relate to meat and meat products (6 tariff lines), 
alcoholic beverages (18 tariff lines), certain lubricating oil (3 lines), certain chemical products 
(2 tariff lines = sodium hydroxide in aqueous solution and certain kind of sorbitol), and vehicles 
(194 tariff lines, including tractors, motor vehicles for transport of less than 10 persons, motor 
n.a.n.a.0%5%10%15%20%25%
Food,
beverages
and
tobaccoTextiles
and
leatherWood and
furniturePaper,
printing
and
publishingChemicals Non-
metallic
mineral
productsBasic
metalFabricated
metal
products
and
machineryOther Total
manuf.Chart 3.[Pak]    Tariff escalation by 2 -digit ISIC industry, 2014/15 and 2021/22
n.a.0%5%10%15%20%25%
Food,
beverages
and
tobaccoTextiles
and
leatherWood and
furniturePaper,
printing
and
publishingChemicals Non-
metallic
mineral
productsBasic
metalFabricated
metal
products
and
machineryOther Total
manuf.Average applied rate in manufacturing
(14.8%)
n.a.   Not applicable.
Note:       Excluding specfic rates.
Source:  WTO Secretariat calculations, based on data provided by the authorities and data taken 
from the Federal Board of RevenueFirst stage of processing Fully processed Semi-processedAverage applied rate in manufacturing
(12.5%)2014/15
2021/22WT/TPR/S/424 • Pakistan  
 
- 64 - 
 
  vehicles for the transport of goods, special purpose vehicles such as crane lorries, chassis and bodies, 
motorcycles, bicycles, and trailers). Partially bound lines relate to those under petroleum  oils (1  line), 
certain raw hides and skins (7 lines), and certain paper and paperboard products (10 lines). 
Furthermore, all specific rates are bound at ad valorem  rates except for one line under HS Chapter  28 
(inorganic chemicals – sodium hydroxide, in a queous solution) being unbound. All ad valorem  bound 
rates are higher than the calculated AVEs.  
3.36.   The average bound tariff is 61.5%. The average bound tariff for agricultural products 
(WTO  definition) is 96.3%, while the average bound rate for non -agricultur al products 
(WTO  definition) is 56.8%. Considering that the average bound rate is over five times the average 
applied MFN tariff, the authorities have considerable scope to change the tariff.  
3.1.3.5   Tariff preferences  
3.37.   Preferential rates are granted for certain ar ticles under the SAFTA, and regional trade 
agreements (RTAs) with China, Malaysia, Sri Lanka, and the Islamic Republic of Iran, as well as the 
partial scope agreements (PSAs) with Mauritius and Indonesia (Section 2.3.2). Preferences under 
the RTAs with Chi na, Malaysia, and Sri Lanka and under the SAFTA are significantly lower than the 
average applied MFN of 12.1% (Table  3.3). Furthermore, the number of duty -free tariff lines under 
the preferential trade agreements (except the Islamic Republic of Iran) are a lso greater than that 
under the MFN tariff.  
Table 3.3 Summary analysis of the preferential tariff, 2020/21  
 
Total   
WTO agriculture   
WTO 
non-agriculture  
Average 
(%) Duty -
free 
ratesa 
(%) Coverageb 
(%)  
Average 
(%) Duty -
free 
ratesa 
(%)  
Average 
(%) Duty -
free 
ratesa 
(%) 
MFN  
(as at end -June)  12.1 28.9   
13.2 6.1  
11.9 32.0 
SAFTA  8.0 29.0 34.2  
5.5 6.7  
8.3 32.1 
China FTA           
as at 01/01/2020  9.0 47.1 39.4  
7.6 48.7  
9.2 46.9 
as at 01/01/2021  8.8 47.1 40.9  
7.3 48.7  
9.0 46.9 
Malaysia FTA  9.5 44.4 30.4  
6.4 63.2  
9.9 41.9 
Sri Lanka FTA  3.5 85.8 57.1  
2.6 90.7  
3.7 85.1 
Mauritius Partial 
Scope Agreement  11.9 29.9 1.0  
12.6 9.1  
11.8 32.7 
Indonesia Partial 
Scope Agreement  12.0 29.6 2.3  
12.7 9.7  
11.9 32.3 
Islamic Republic of 
Iran FTA  12.0 28.9 4.5  
12.9 6.1  
11.9 32.0 
a Duty-free lines as a percentage of total tariff lines.  
b  Percentage of total number of lines. Only rates that are lower than the corresponding MFN rate are 
taken into account.  
Note:  Calculations  are based on national tariff line level (8 -digit); averages exclude specific rates.  
Source:  WTO Secretariat calculations, based on data provided by the authorities, and on data taken from the 
Federal Board of Rev enue.  
3.1.3.6   Tariff exemptions and concessions  
3.38.   Pakistan provides certain exemptions and concessions to the statutory tariff through SROs 
(Section 2.2.3). According to the IMF, the Government's budget proposal included a commitment to 
bringing 30 sectors and 133 H S codes under the normal tariff regimes, withdrawing concessions for 
138 industries, and setting the normal tariff rates for machinery and equipment imported by textile 
firms. Subsequently the Government incorporated the Fifth Schedule into the Customs Act  1969 in 
FY2014/15. The Fifth Schedule provides for exemptions and concessions from the tariff for certain 
goods to be used under specific conditions. Goods allowed to be imported under the Fifth Schedule 
are of four types: consumer products (food, petrole um products, and liquified natural gas (LNG)), 
plant and machinery (pharmaceuticals, textiles, agriculture and food chain machinery, renewable 
energy, and other power plants), raw materials for industry (active pharmaceutical ingredients, 
drugs, textiles, poultry, automotive industry, etc.), and some other products (for domestic protection WT/TPR/S/424 • Pakistan  
 
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  and export industries). As part of the National Tariff Policy 2019 -24, 234 tariff lines were removed 
from the Fifth Schedule through the Finance Act 2021. Furthermore, an y change or addition in the 
concessionary rates provided for in the Fifth Schedule are now required to be approved by the 
Parliament. The authorities estimate that the cost of exemption due to the Fifth Schedule for 2020/21 
was PKR  190 billion.  
3.39.   Since 2015,  the Government has issued around 30 trade -related SROs; some deal with 
procedural issues, while others relate to exemptions and concessions. According to the authorities, 
SROs are instruments of delegated legislation, as such the Federal Government can pr ovide 
exemption from duties and taxes in very limited and specific circumstances such as food emergency. 
The mechanism of revision in the Customs tariffs has been changed, and the responsibility has been 
assigned to the Ministry of Commerce (MoC) rather th an the Federal Board of Revenue (FBR). A 
Tariff Policy Board (TPB) has been constituted. The decisions of the TPB are submitted to the Federal 
Cabinet for approval. After this inclusive process, notifications in the form of SROs are issued to 
implement the  decisions.  
3.1.4   Other charges affecting imports  
3.40.   Pakistan has bound other duties and charges at zero. On 30  June 2021, SROs were issued, 
and these revalidated regulatory duties, ranging between 2% and 90% in addition to some specific 
rates8, were applied on ne arly 600 products, as were additional customs duty on some products.9 
These SROs supersede those issued in earlier years during the review period. It is required by law 
that these SROs are submitted to Parliament every year for revalidation. They do not n ecessarily 
impose any new duties or charges. In addition, imports are also subject to a sales tax at 17%, while 
certain imports also incur an excise duty (Section 3.3.1).  
3.1.5   Import prohibitions, restrictions, and licensing  
3.41.   Imports into Pakistan are governed b y the Customs Act 1969, Customs Rules 2001, and the 
Import Policy Order 2020. The Import Policy Order 2020 provides for the import of all goods unless 
specified in Appendix A (prohibited items) (Table A3. 2), Appendix B (restricted items) (Table  A3.3), 
or Appendix C (import restrictions on used goods) (Table A3. 4). Furthermore, under the provisions 
of the Law, the Government may prohibit or restrict imports where it is deemed to be in the public 
interest to do so.  
3.42.   Imports of certain goods are banned due to health, safety, security, moral, religious, and 
environmental reasons. Additionally, imports from Israel or those of Israeli origin are banned.  
3.43.   Items on the restricted list can be imported under certain conditions, which are specified in 
Appendix B of the I mport Policy Order. These include prior approval or clearance, clearing testing 
arrangements, and complying with certain procedural requirements (Appendix B of the Order, 
Part 2). Import of second -hand plant machinery by the construction, mining, and petro leum sectors 
is allowed, subject to a pre -shipment inspection by companies listed in Appendix D of the Import 
Policy Order.  
3.44.   Part II of Appendix B of the Import Policy Order 2020 provides an overview of the procedural 
requirements for the importation of res tricted items, including permissions and registrations to be 
obtained. It appears Pakistan does not maintain an import licensing regime within the meaning of 
Article  1.1 of the Agreement on Import Licensing Procedures. However, Pakistan has not submitted 
replies to the WTO Questionnaire on Import Licensing Procedures. The authorities state that the 
submission was being prepared.  
3.45.   Any dispute or clarification regarding the import status of any item that cannot be resolved 
by Customs can be referred to the MoC , whose decision is final.  
 
8 Ministry of Finance and Revenue, Notification (Customs) , 30 June 2020. Viewed at: 
https://download1.fbr.gov.pk/SROs/202171872659187SRO840(I)2021,30.06.2021.pdf . 
9 Ministry of Finance and Revenue, Notification (Customs) , 30 June 2021. 
https://download1.fbr.gov.pk/SROs/202171873622728SRO -845(I) -2021,30.06.2021.pdf  WT/TPR/S/424 • Pakistan  
 
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  3.1.6   Anti-dumping, countervailing, and safeguard measures  
3.46.   The investigating authority for anti -dumping, countervailing, and safeguards is the National 
Tariff Commission (NTC). The NTC operates under the provisions of the Anti -Dumping Duties 
Act 2015, which replaced the Anti -Dumping Duties Ordinance 2000. The Anti -Dumping Duties Act 
2015 has been notified to the WTO.10 
3.47.   The Anti -Dumping Duties Act 2015 brings the methodology of the NTC for anti -dumping 
investigations into harmony with th e WTO Anti -Dumping Agreement and seeks to avoid litigation in 
domestic courts against its actions.  
3.48.   The main changes incorporated in the new Act include enabling the domestic industry to file 
back-to-back applications in case of termination or conclusion of  an investigation by the Commission, 
provisions for the imposition of lesser provisional and final duties that are in public interest as well 
as in the interest of domestic industry, and the exemption from anti -dumping duty on import of raw 
material used o nly as inputs of exports, DTRE, and bonded warehouse.  
3.49.   The new Act also strengthens the anti -circumvention provision and circumstances under which 
anti-dumping duty may be extended on products from third countries, and on slightly modified 
products. Further more, the Act explains the mechanism and the anti -circumvention duty.  
3.50.   Additionally, the appeals mechanism has also been modified. Appeals against initiation, 
preliminary determination, final determination, and termination under Section 41 are provided for;  
appeals against initiation and preliminary determinations need to be concluded within 30 and 
45 days, respectively. Recourse to the High Court is possible and the Court must provide a ruling on 
the appeal within 30  days.  
3.1.6.1   Anti-dumping  
3.51.   During the review period, Pakistan conducted 32 anti -dumping investigations, and action was 
taken on 22 of these. Furthermore, over the same period, 10 anti -dumping actions were terminated. 
At the end of March 2021, Pakistan had 53 definitive anti -dumping duties on 20 products from 
22 countries (Tables 3.4 and 3.5).  
Table 3.4 Outstanding definitive anti -dumping duties, end -March 2021  
Country  Product  Final measures  Date(s) of 
extension  
Bangladesh  Hydrogen peroxide  14 March 2016  .. 
Belgium  Hydrogen peroxide  6 July 2011  20 January 2017  
Brazil  Certain uncoated writing and printing paper  30 March 2018  .. 
Canada  Cold rolled coils  20 September 2019  .. 
China  Hydrogen peroxide  6 July 2011  20 January 2017  
Biaxially oriented polypropylene film  7 February 2013  1 December 2016  
Polyester staple fibre  3 February 2016  .. 
Galvanized coil  2 February 2017  .. 
Cold rolled coils/sheets  19 January 2017  .. 
Continuous casting (steel) billets  22 June 2017  .. 
Certain uncoated writing and printing paper  30 March 2018  .. 
One-side coated duplex board grey back  29 July 2017  .. 
Coated bleached board/folding box board 
with white back  10 April 2018  .. 
Wall and floor tiles  11 October 2017  .. 
Polyester filament yarn  26 August 2017  .. 
Deformed concrete reinforcing steel bars  23 October 2017  .. 
Sulphonic acid  27 January 2018  .. 
Polyvinyl chloride (suspension grade)  25 April 2018  .. 
Colour coated steel coils/sheets  13 June 2018  .. 
Lead pencils  10 October 2018  .. 
Tinplate  30 January 2019  .. 
European Union  Tinplate  30 January 2019  .. 
India Sorbitol 70% solution  23 December 2015  .. 
Cotton yarn 55.5 and above counts  18 October 2017  .. 
Sulphonic acid  27 January 2018  .. 
Inorganic yellow chrome pigment  25 August 2020  .. 
 
10 WTO document G/ADP/N/1/PAK/3 and G/SCM/N/1/PAK/3, 20  January  2016.  WT/TPR/S/424 • Pakistan  
 
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  Country  Product  Final measures  Date(s) of 
extension  
Indonesia  Hydrogen peroxide  6 July 2011  20 January 2017  
Certain uncoated writing and printing paper  30 March 2018  .. 
One-side coated duplex board grey back  29 July 2017  .. 
Sulphonic acid  27 January 2018  .. 
Islamic Republic of 
Iran Sulphonic acid  27 January 2018  .. 
Japan  Certain uncoated writing and printing paper  30 March 2018  .. 
Republic of Korea  Hydrogen peroxide  6 July 2011  20 January 2017  
One-side coated duplex board grey back  29 July 2017  .. 
Sulphonic acid  27 January 2018  .. 
Polyvinyl chloride (suspension grade)  25 April 2018  .. 
Inorganic yellow chrome pigment  25 August 2020  .. 
Malaysia  Polyester filament yarn  26 August 2017  .. 
Oman  BOPP film  7 February 2013  1 December 2016  
Russian Federation  Cold rolled coils  20 September 2019  .. 
Saudi Arabia, 
Kingdom of  BOPP film  7 February 2013  1 December 2016  
South Africa  Colour coated steel coils/sheets  13 June 2018  .. 
Tinplate  30 January 2019  .. 
Separate Customs 
Territory of Taiwan, 
Penghu, Kinmen and 
Matsu (Chinese 
Taipei)  Hydrogen peroxide  6 July 2011  20 January 2017  
Sulphonic acid  27 January 2018  .. 
Polyvinyl chloride (suspension grade)  25 April 2018  .. 
Thailand  Hydrogen peroxide  6 July 2011  20 January 2017  
Certain uncoated writing and printing paper  30 March 2018  .. 
Polyvinyl chloride (suspension grade)  25 April 2018  .. 
Turkey  Hydrogen peroxide  6 July 2011  20 January 2017  
Ukraine  Cold rolled coils/sheets  19 January 2017  .. 
United Arab Emirates  BOPP film  7 February 2013  1 December 2016  
United States  Tinplate  30 January 2019  .. 
Source:  Information provided by the authorities.  
Table 3.5 Anti-dumping actions, July 2014 to March 2021  
Country  Product  Initiation  Provisional 
measures  Final measures  
China  Electrical capacitors  23 January  2020 No duty imposed 
16 July 2020 Terminated on 
15 October  2020 
Phthalic anhydride  7 December  2019 No duty imposed 
5 June 2020 In progress  
Offset printing ink  7 December  2015 9.70% -19.12% 
21 December  2016 Terminated on 
21 July 2017 
Wire rod  19 October  2015 No duty imposed 
14 April 2016 Terminated on 
21 September  2017 
European  Union  Cold rolled coils/sheets  25 February  2021 In progress   
India Dextrose monohydrate  13 November  2015 7.04% 
28 October  2016  Terminated on 
12 May 2017 
Indonesia  Polyester staple fibre  6 February  2021 In progress   
Jordan  Aluminium beverage 
cans 1 November  2018 21.86%  
3 May 2019 Terminated on 
21 February  2020 
Republic of Korea  Cold rolled coils/sheets  25 February  2021 In progress  
  
Phthalic anhydride  7 December  2019 No duty imposed 
5 June 2020  
Offset printing ink  7 December  2015 9.64% 
21 December  2016 Terminated on 
21 July 2017 
Russian  Federation  Phthalic anhydride  7 December  2019 No duty imposed 
5 June 2020  
Phthalic anhydride  3 December  2016 13.68% 31  May 2017 Terminated on 
16 December  2017 
Sri Lanka  Aluminium beverage 
cans 1 November  2018 17.14% 3 May 2019 Terminated on 
21 February  2020 
Separate Customs 
Territory of Taiwan, 
Penghu, Kinmen and 
Matsu 
(Chinese  Taipei)  Cold rolled coils/sheets  25 February  2021 In progress   
Polyester staple fibre  6 February  2021 In progress   
Phthalic anhydride  7 December  2019 No duty imposed 
5 June 2020  
Thailand  Polyester staple fibre  6 February  2021 In progress   
Turkey  Disodium carbonate 
(soda ash)  30 March  2021 In progress   
Aluminium beverage 
cans 1 November  2018 Terminated on 
3 May 2019  WT/TPR/S/424 • Pakistan  
 
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  Country  Product  Initiation  Provisional 
measures  Final measures  
Viet Nam Cold rolled coils/sheets  25 February  2021 In progress   
United Arab 
Emirates  Aluminium beverage 
cans 1 November  2018 18.26% 3  May 2019 Terminated on 
21 February  2020 
Source:  Information provided by the authorities.  
3.1.6.2   Countervailing  
3.52.   During the review period, Pakistan undertook a countervailing investigation against fine cotton 
yarn from India on 20  April 2016. Provisional measures were applied in January 2017. However, no 
final measures were imposed, as anti -dumping mea sures had been imposed on the same product.11 
3.1.6.3   Safeguards  
3.53.   Pakistan has never undertaken any safeguard measures.  
3.2  Measures Directly Affecting Exports  
3.2.1   Customs procedures and requirements  
3.54.   Exports are governed under the Export Policy Order 2020. To be able to export, an exporter 
needs to register a business name, obtain a national tax number, and register the business with the 
relevant chamber of commerce and industry. The exporter also need s to register with WeBOC and 
have a Form  E issued online by a bank through the WeBOC portal (Section 3.1.1).12 It is also 
recommended, but not mandatory, that exporters register with the sales tax department and obtain 
a sales tax number, especially if the  exporter plans to claim a sales tax refund/deduction.  
3.55.   In addition to the above, the exporter needs to furnish the shipping line's loading programme, 
invoice, packing list, and any other relevant documents that may be required, such as a certificate 
of ori gin issued by the chamber of commerce and industry, DRTE approval, brand ownership 
certificates, and SPS certificates.  
3.56.   Export contract registration with Trade Development Authority of Pakistan (TDAP) remains a 
requirement for export of cotton. Quality (pre -shipment) inspection of basmati rice remains in place 
and is undertaken by the MoC and the Rice Exporters Association Pakistan (REAP). Furthermore, 
minimum export price requirements were abolished in September 2021.13 Hot water treatment for 
mangoes to be  exported to the European  Union is mandatory. While the Pakistan Standards and 
Quality Control Authority (PSQCA) has legislative quality inspection and testing responsibilities for 
exports, its role is apparently relatively minor.  
3.57.   Jewellery and gemstone ex porters must be registered with TDAP in order to import gold duty - 
and tax -free.14 The export of gold jewellery must take place within 120 days of importing the gold; 
failing that, duties and taxes plus a 5% penalty for the first month and 10% thereafter are imposed. 
Unless sales receipts are realized within 120 days from export, a mont hly 1% penalty of sale 
proceeds is incurred.  
3.58.   The exporter submits the online goods declaration (GD) with all the associated details and 
documents through WeBOC.15 The GD is analysed and marked for the red, yellow, or green channel 
based on the risk element . According to the authorities, 95% of all export  cargo is presently cleared 
through the green and yellow channels, which allows for a speedier release of the products and does 
 
11 WTO document G/SCM/N/328/PAK, 26  February  2018.  
12 Form E or E -Form stands for Export Form , which is issued by the dealing bank to make exports. It is a 
type of mandatory declaration to the bank that an export is intended to be made against realization of the 
foreign exchange , which either has arrived in the exporting country or is contracted to arrive after shipment 
maturity. Form  E binds the exporter to repatriate foreign exchange equal to the value of export.  
13 SRO 1275 (I) 2021.  
14 SRO 760(I)/2013.  
15 The GD can only be filed 10 day s before the expected arrival of the vessel, and must be filed within 
15 days after the arrival of the vessel.  WT/TPR/S/424 • Pakistan  
 
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  not involve a physical examination of the consignment. Exports passing through the red channel 
incur a physical inspection and assessment with delays of two to four days on average.  
3.59.   WeBOC assesses any duties and taxes to be paid or refunded. Once the accounts are settled, 
the consignment is cleared for export.  
3.2.2   Taxes, charges, and lev ies 
3.60.   Under Section 18 of the Customs Act, export taxes are not permitted; however, the FBR may 
impose regulatory duties (RDs) (Section 3.1.4) of up to 100% on exports, by notification. To be able 
to impose RDs, approval from the concerned Minister is requir ed (Section  18(3) of the Act).16 The 
FBR maintains a list of active export notifications including regulatory duties on exports (Table  3.6).17 
Table 3.6 Regulatory duty on exports, 2021  
SRO number  Products cov ered % of RD  
1 645(I)/2018  Waste and scrap of copper  25% 
Molasses  15% 
Raw and wet blue hides and skins  20% 
Unwrought lead  25% 
Ferrous and non -ferrous waste and scrap of lead  25% 
Lead plates, sheets, strip and foil, lead powders and flakes  25% 
Lead bars, rods profiles and wire  25% 
Waste and scrap of primary cells, primary batteries and electric 
accumulators, spent primary cells, spent primary batteries and electric 
accumulators, electrical parts of machinery or apparatus, or specified or 
included in Chapter 85 of Pakistan Customs Tariff  25% 
Source:  Federal Board of Revenue.  
3.61.   According to the authorities, regulatory duty on exports is to ensure domestic supply of these 
goods, and not a means to raise revenue or pr otect domestic industry. However, export taxes and 
duties have a distortive impact on the domestic market.  
3.62.   Since 1991, an export development surcharge of 0.25% of the f.o.b. value has been levied 
on all exports to finance the EDF.18 Additionally, exporters pay a 1% income withholding tax instead 
of income tax, and exports from EPZs are exempt, as are certain products depen ding on specific 
SROs, for example, in the case of cement.  
3.2.3   Export prohibitions, restrictions, and licensing  
3.2.3.1   Export prohibitions  
3.63.   Pakistan prohibits the export of certain goods based on moral, religious, health, social, and 
environmental grounds, as well as those whose trade is prohibited under international treaties such 
as CITES and UN resolutions. Pakistan also prohibits exports to Israel and India (except therapeutic 
products regulated by the Drug Regulatory Authority of Pakistan). Export of some products  
considered to be essential is also prohibited to ensure adequate domestic supply. However, under 
Section 5 of the Export Policy Order 2020, the Federal Government has the power to relax any 
prohibition or restriction detailed in the Order.  
3.64.   Goods prohibite d for export are listed in Schedule  I of the Export Policy Order 2020. These 
include, inter alia , counterfeit products, chemicals that can be used in the manufacture of chemical 
weapons, wild mammals and reptiles, pulses, gram, gram flour, sugar, fissionab le material, 
intoxicants and intoxicating liquors, fertilizer including urea, charcoal and firewood, wood and timber, 
shuttering material of poplar wood, Sann hemp, anti -personnel landmines, antiquities, wheat and 
wheat flour, and wheat products.  
 
16 Customs Act 1969 (as amended up to 30 June 2017).  
17 Federal Board of Revenue , Customs Active/Operative Notificatio ns/SROs Export . Viewed at: 
https://www.fbr.gov.pk/ActiveSrosExport .  
18 SRO 10(I)/2003, Notification from the Ministry of Finance.  WT/TPR/S/424 • Pakistan  
 
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  3.2.3.2   Export re strictions and licensing  
3.65.   According to the authorities, Pakistan does not maintain an export licensing regime. However, 
the export of certain products is restricted, and those products can only be exported if certain 
conditions are met. These are detailed i n Schedule  II of the Export Policy Order 2020 (Table 3.7).  
Table 3.7 Restricted exports  
 HS Code  Item/goods  Condition/procedure/formalities  
1 0103.0000  
0203.0000  
4103.3000  Wild boars, their meat and 
skin 
 Permissible only by non -Muslim exporters  
2 0106.0000  Pet dogs and cats  Allowed on issuance of Quarantine Certificate about health 
and caging by the Animal Plant Quarantine Department  
3 0703.1000  Onions  Allowed except through land route via Wagah to India  
4 0804.5020  Mango  (i) Export to Europe, Canada, the Islamic Republic of Iran, 
China, the State of Kuwait, and the Kingdom of Bahrain by air 
only in specified standardized packaging  
(ii) Export shall no t be allowed before 20  May unless 
otherwise specified by the Ministry of Commerce  
5 0805.2010  Kinnow (fresh)  The export of citrus hybrid (kinnow) shall not be allowed 
before 1  December  
6 1006.0000  Rice Subject to the conditions and procedures specified by the 
Ministry of Commerce  
7 1207.9100  Poppy seeds  Allowed if imported from the countries where opium poppy is 
grown legally  
8 1516.1000  
1516.2010  
1516.2020  
1518.0000  Vegetable ghee and cooking 
oil 
 (i) Export shall be allowed (excluding that manufactured in 
manufacturing bonds and export -oriented units in case of 
exports to Afghanistan only) provided there is value addition 
of 15% for edible uses in packs up to 25 litres for cooking oil 
and 25 kilograms for vegetable ghee. Howe ver, 50% value 
addition in ghee and cooking oil in non -edible uses in packs 
up to half litre or half kilogram;  
(ii) Containers  or packages exported to Afghanistan must 
contain ingredient information printed in Dari and Pushto 
languages;  
(iii) Bulk export o f indigenous oils (sunflower, canola, and 
cotton seed)  
9 5201.0000  Cotton  
 (i) Export contract registration with TDAP against security 
deposit of 1% of the contract value and presentation of the 
same before customs authorities with shipping documents 
along with cotton grading and classification certificate issued 
by the Pakistan Cotton Standards Institute.  
(ii) An irrevocable letter of credit shall be opened by the 
buyers within 35 days and the shipment of contracted 
quantity shall be complet ed within 180 days of the 
registration of contract. In case the letter of credit is not 
opened within the stipulated time or of non -performance of 
the contract, the security deposit shall be forfeited by the 
State Bank of Pakistan proportionate to the quan tity not 
shipped.  
(iii) The export of cotton shall be allowed on the basis of types 
as well as grades. The exporters shall, however, mention the 
grade equivalence on the shipping documents if they opt to 
export the cotton on type basis and the requirement of 
classification and grading certificate in such cases shall be 
dispensed with, if the ginned cotton is packed in export 
packing.  
10 Respective 
headings  Metals  (i) Export of metals by foreign enterprises will be governed by 
a special mechanism identified  by Ministry of Petroleum and 
Natural Resources for checking the prices, etc.  
(ii) Export of all commodities falling under Export Control on 
Goods, Technologies, Material and Equipment related to 
Nuclear and Biological Weapons and their Delivery Systems 
Act 2004 (Act No. V of 2004) and control lists issued 
thereunder are subject to License Ministry of Foreign Affairs.  
11 Respective 
headings  Arms, ammunition, 
explosives and ingredients 
thereof  (i) No Objection Certificate (NOC) from Ministry of Defence 
Production.  
(ii) Licence for items falling under Export Control on Goods, 
Technologies, Material and Equipment related to Nuclear and 
Biological Weapons and their Delivery Systems Act 2004 (Act 
No. V of 2004) and control lists issued there under.  WT/TPR/S/424 • Pakistan  
 
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   HS Code  Item/goods  Condition/procedure/formalities  
12 Respective 
headings  Dual-use goods, 
technologies, material and 
equipment that can be used 
in nuclear and biological 
weapons and their delivery 
systems as well as have 
commercial uses  As per provisions of the Export Control on Goods, 
Technologies, Materi al and Equipment related to Nuclear and 
Biological Weapons and their Delivery Systems Act, 2004  
13 Respective 
headings  Complete rocket and 
unmanned air vehicle (UAV) 
systems and their parts  (i) NOC from Ministry of Defence Production.  
(ii) As per provisions of the Export Control on Goods, 
Technologies, Material and Equipment related to Nuclear and 
Biological Weapons and their Delivery Systems Act, 2004  
14 Respective 
headings  Nuclear substances, 
radioactive materials and 
any other substance or item 
covered by the Pakistan 
Nuclear Regulatory Authority 
Ordinance, 2001 and other 
than those falling under 
"Export Control on Goods, 
Technologies, Material and 
Equipment related to 
Nuclear and Biological 
Weapons and their Delivery 
Systems Act 2004 (Act No. 
V of 2004)"  As per procedure notified by the Pakistan Nuclear Regulatory 
Authority.  
 
15 Respective 
headings  Equipment used for 
production, use or 
application of nuclear energy 
or activity including 
generation of electricity and 
spares related to these  (i) As per procedure notified by the Pakistan Nuclear 
Regulatory Authority;  
(ii) Licence of Ministry of Foreign Affairs as per provisions of 
the Export Control on Goods, Technologies, Material  and 
Equipment related to Nuclear and Biological Weapons and 
their Delivery Systems Act, 2004  
16 Respective 
headings  Precious and semi -precious 
stones and gold jewellery  As per procedure specified in the Import and  
Export of Precious Metals, Jewellery and  
Gemstones Order, 2013  
17 Respective 
headings  Surgical instruments  Subject to test report to be issued by the Sialkot Material 
Testing Laboratory  
18 Respective 
headings  Fruits in retail packing  Gross weight to be indicated  
19 Respective 
heading  Ethanol and other products 
manufactured from cane 
molasses  Export of ethanol and other products manufactured from cane 
molasses shall be subject to the condition that the cane 
molasses used in production of the ethanol and other products  
manufactured from cane molasses being exported is either  
produced in -house by the exporter or purchased directly from 
a sugar mill.  
20 Respective 
heading  Tobacco and tobacco 
products  The export shall be subject to licence issued by  
Pakistan Tobacco Board  (PTB).  
Source:  Export Policy Order 2020, Ministry of Commerce.  
3.66.   Pakistan also has a negative list of items for export to Afghanistan under the duty drawback 
scheme; these are detailed in Schedule  III of the Export Policy Order 2020 and include cigars, 
cheroots, cigarillos and cigarettes of tobacco or of tobacco substit utes; dyes and chemicals; yarn of 
all types; polyester metalized film; ball bearings; and vegetable ghee and cooking oil (if exported 
from EPZs, manufacturing bonds, and export -oriented units). These are mainly surgical goods.  
3.2.4   Export support and promotion  
3.67.   Pakistan has a number of export support and promotion measures in place. In addition to the 
EPZ, other initiatives currently in place include the MB, the DRTE, Export Oriented Units and Small 
and Medium Enterprise Scheme (EOU), and the recently introduced EFS. 
Export processing zones  
3.68.   EPZs were set up in 1980 under the EPZ Authority Ordinance. Incentives provided to 
companies based in EPZs are provision of developed land on competitive rates for 30 years; 
duty-free import of machinery, equipment, and materia ls; exemption from national import 
regulations and exchange control regulations; full repatriation of capital and profits; exemption from 
sales tax on input goods including electricity/gas bills; import of duty -free vehicles allowed under 
certain condition s; domestic market available to the extent of 20% (exceptions may be allowed); WT/TPR/S/424 • Pakistan  
 
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  presumptive tax at 1% (only the Export Processing Zones Authority (EPZA) is authorized to collect 
presumptive tax at the time of export of goods, which would be final tax liabil ity); obsolete/old 
machines can be sold in domestic market of Pakistan after payment of applicable duties and taxes; 
defective goods/waste can be sold in domestic market after payment of applicable duties, maximum 
up to 3% of total value; and EPZ units all owed to supply goods to Custom manufacturing bonds.  
3.69.   Currently there are seven designated EPZs (Table 3.8), while a further two are planned.  
Table 3.8 Export processing zones, 2021  
Name  Number of enterprises  2019/20 exports 
(USD  million)  Cumulative exports 
(USD  million)  
Karachi  266 614.1  9,036.8  
Sialkot  37 21.0 58.3 
Risalpur  28 3.0 23.6 
Gujranwala  13 1.3 4.2 
Saindak  1 55.0 2,258.7  
Duddar  1 30.9 201.6  
Tueairqi  Dormant  n.a. n.a. 
n.a. Not applicable.  
Source:  Export Processing Zones Authority. Viewed at: https://epza.gov.pk/ . 
Manufacturing Bond Scheme  
3.70.   The Manufacturing Bond Scheme provides warehousing facility without payment of import 
duty, sales tax, fe deral excise duty (FED), and withholding tax on import of raw materials required 
for the manufacture of export goods. A manufacturer cum exporter having an in -house production 
facility is required to seek a licence for operation of manufacturing bond for i mportation of raw 
materials required for the manufacture of finished goods meant for export.  
Duty and Tax Remission for Export Scheme  
3.71.   Under the DTRE Scheme, import duty, sales tax, FED, withholding tax on acquisition through 
import and local purchase of in put goods required for the manufacture of output goods meant for 
exports are suspended. An exporter is required to seek prior permission from the concerned Customs 
Collectorate before importation of required input goods on submission of financial security,  which is 
released on submission of proof of export. Commercial exporters are also eligible to avail this facility 
for same -state export of locally purchased input goods on submission of bank guarantee.  
Export Oriented Units and Small and Medium Enterprise  Scheme  
3.72.   The EOU Scheme provides exemption from payment of customs duty, sales tax, FED, and 
withholding tax on import and local purchase of raw materials required for the manufacture of export 
goods, as well as plant machinery, equipment, apparatus and cap ital goods used solely in the 
manufacture of goods for export. Licensing of the applicant is required to use the facility. The 
utilization period for raw materials is 24 months, and the retention period for the machinery/spares 
is 10 years. The exporters r equired to export at least 60% of its annual production abroad, 20% 
indirect export against securities or on payment of duty/taxes, and the remaining 20% can also be 
sold in the local market on payment of duty/taxes.  
Export Facilitation Scheme  
3.73.   Under the Fi nance Act 2021, the Government introduced the EFS 2021, effective from 
August  2021. It is envisaged that the scheme would run in parallel with existing schemes for a period 
of two years, at which point the EFS would replace them. The EFS is expected to be used by exporters 
(manufacturers cum exporters, commercial exporters, and indirect exporters), common export 
houses, vendors, and international toll manufacturers. They would need authorization of inputs by 
the Collector of Customs and the Director General  of the Input -Output Coefficient Organization 
(IOCO). Inputs include all goods (imported or procured locally) for manufacture of goods to be 
exported.  To utilize the scheme, users need to provide documentation and securities based on their 
category and profile. It is expected that the scheme would encourage new entrants and small and 
medium -sized enterprises (SMEs). Furthermore, the EFS is completely aut omated and utilizes WT/TPR/S/424 • Pakistan  
 
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  WeBOC and Pakistan Single Window, where users of the scheme and regulators (IOCO, Regulator 
Collector, Post Clearance Audit, etc.) are integrated. The EFS is focused on post -clearance 
compliance checks and audits. Under the scheme, the authorization and utilization period has been 
enhanced from two to five years.  
3.74.   It is expected that EFS 2021 would reduce cost of doing business and cost of tax compliance, 
improve ease of doing business, and reduce liquidity problems of exporters by elimin ating sales tax 
refunds and duty drawback for the users of the EFS.  
3.75.   In January 2017, the Government announced a PKR 180 billion incentive package for 
exporters. The package included the removal of customs duty and sales tax on the import of cotton, 
man-made fibres other than polyester, and textile machinery. Additionally, under the package, new 
duty drawback rates for textile garments (7%); textile made -ups (6%); processed fabric (5%); yarn 
and grey fabric (4%); and sports goods, leather and footwear (7%) w ere also announced. In 
June 2018, the package was extended for a further three years. The scheme expired on 
30 June 2021.  
3.76.   Incentives for the export sector were also announced under the Strategic Trade Policy 
Framework 2015 -18, namely, technology upgrades, brand certification, product development, 
support for plant and machinery for agro -processing, and drawback of local taxes  and levies.19 
3.77.   The EDF, which is financed by a 0.25% surcharge on exports, also provides incentives to 
exporters. Its aim is "to address bottlenecks faced by the exporters and producers of export goods 
and services in Pakistan with a view to increase the p erformance of export sector".20 Since its 
inception, the EDF has funded projects, including funding for effluent treatment plants, warehouses, 
training institutes and laboratory upgrades. The funds have also been approved for providing soft 
training interv entions, conducting research studies, hiring technical experts, providing services for 
increased compliance, and branding/marketing (Table  3.9). 
3.78.   The TDAP is responsible for providing support for export promotion and marketing. In this 
regard, it provides s upport for participation in over 100  international trade fairs annually; sends and 
receives international trade delegations; organizes EXPO Pakistan annually; runs the EXPO Centre 
in Karachi, which provides a permanent exhibition space for holding trade ev ents; and undertakes 
and implements various sector development projects financed from the EDF.  
Table 3.9 Incentives, subsidies, and facilities  
2009 -12 
25% freight subsidy on live seafood  
6% R&D support on expo rt of processed food  
25% subsidy of setting up of design centres and laboratories (leather)  
50% subsidy in obtaining Underwriters Laboratories (UL) certification in exporting markets (industrial 
products)  
50% subsidy for cost of obtaining halal certificati on 
Subsidy towards upgrading abattoirs/slaughterhouses operated by district governments  
Support for hiring representative abroad to facilitate pharmaceutical exports  
Support for pharmaceutical product registration in foreign countries  
Support for Bio -Equiv alence Certification  
Support for opening retail outlets abroad  
Support for opening Exporters Offices abroad  
50%-100% subsidy for gaining compliance certification (e.g. ISO)  
8%-50% subsidy on loans in connection with maintaining cold storage for horticultur al products  
 
19 MoC, New Incentives for the Exporters of Pakistan under STPF 2015-18. Viewed at: 
https://www.commerce.gov.pk/new -incentives -for-the-exporters -of-pakistan -under -stpf-2015-18/. 
20 MoC, Export Development Fund, About Us . Viewed at: https://edf.gov.pk/about_us . WT/TPR/S/424 • Pakistan  
 
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  2012 -15a 
Mark-up support of 2% on prevailing Long -Term Financing Facility (LTFF) for future import/purchase of 
machinery  
Mark-up rate support of 1.5% on Export Finance Scheme (EFS) to select export sectors  
Mark-up subsidy at 50% of the prevailing mark -up rate for setting up meat processing plants in bordering 
provinces  
50% subsidy on the cost of processing plants and machinery for adding value to olives and dates from 
Khyber Pakhtun Khwa, Federally Administered Tribal Areas, and Balochis tan 
Mark-up subsidy at 100% of the prevailing mark -up rate and 50% subsidy for wire saw cutting machinery to 
reduce wastage for establishing mining and processing in Khyber Pakhtun Khwa, FATA, Gilgit -Baltistan, and 
Balochistan  
Ad hoc subsidy at 3% of f.o.b . value to offset the impact of cost of utilities for exporters in selected sectors  
2015 -18 
20% investment support up to a maximum of PKR 1 million per annum per company for import of new plant 
and machinery  
50% of mark -up support upgradation of technology for import of new machinery/plant, subject to a 
maximum of PKR 1 million per annum per company  
Matching grant up to a maximum of PKR 5 million for specified plant and machinery or specified items to 
improve product design and encourage innovatio n in SMEs and export sectors of leather, pharmaceutical, 
and fisheries  
Support to SMEs for certification and brand development  
Drawback of Loan Taxes and Levies (DLTL) schemes for fish and fish preparations, meat and meat preparing 
spices, gloves, football  and other sports goods, leather garments, other leather manufactures, footwear, 
surgical good/medical instrument, cutlery, electric fans, transport equipment, auto parts, machinery specific 
for particular industries or other machinery and other electric e quipment, furniture, and pharmaceutical  
50% support on the cost of imported new plant machinery for specified under -developed regions  
100% mark -up support on the cost of imported new plant and machinery on all -Pakistan basis  
a Measures have been announced , but are not yet implemented.  
Source:  TDAP. In addition to incentives offered for certain imports detailed in Fifth Schedule of the Customs 
Act 1969, the legislation provides for duty -free imports of goods under the warehousing and bonded 
warehouse scheme s. Additionally, the Government also operates a duty drawback system, whereby 
a proportion of the customs duty paid on imported goods/inputs used in the manufacture of certain 
exports is refunded. Eligible industries, inputs, and associated rates of refund  are detailed in various 
SROs. Thus far, during 2021/22 PKR 9.3 billion have been refunded as duty drawback.  
3.2.5   Export finance, insurance, and guarantees  
3.79.   In addition to the incentives detailed above, exporters also benefit from preferential financing 
schemes.  These schemes are administered by the State Bank of Pakistan (SBP). Currently, four such 
schemes are operational, compared with three at the time of the previous Review: the EFS, Islamic 
Export Refinance Scheme (IERS), the Long Term Financing Facility (LT FF) for Plant & Machinery, and 
the Islamic Long Term Financing Facility (ILTFF) for Plant & Machinery.  
3.80.   Under the EFS, the SBP provides re -financing support to banks on their loans to exporters – 
either through a transaction -based facility or through a perf ormance -based facility. The mark -up 
rates under the EFS has been 3% since July 2016, while banks' spread for corporate borrowers and 
SME borrowers are 1% and 2%, respectively.21 To further incentivize the financing under the EFS  
(Part II), the rates are linked to export performance, with exporters getting a further rebate of 
0.5% -1.5% depending on performance. The authorities state that the outstanding amount under 
the EFS was around PKR 417 billion as of end -June 2021.  
3.81.   Under the  IERS, exporters can make use of the SBP's refinance against eligible commodities. 
The IERS follows the same basic principles and conditions of the EFS and is accessible through 
 
21 At the time of the previous Review, the mark -up rate was 7.5%, while the banks ' spread has 
remained unaltered.  WT/TPR/S/424 • Pakistan  
 
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  Islamic banks. Currently, 16 Islamic banks in the country provide this facilit y, and the outstanding 
amount under the facility was PKR 160 billion as of end -June 2021.  
3.82.   The LTFF continues to allow Participating Financial Institutions (PFIs) to provide long -term 
financing of up to 10 years for purchase of plant and machinery (both imported and locally 
manufactured) for export -oriented projects. Under the scheme, a maximum grace period of two 
years is permitted. The SBP provides 100% refinance to the banks/DFIs on their disbursements 
under the scheme. The borrower has had the o ption of borrowing for up to 3, 5, or 10 years, at 
financing rates of up to 5% p.a., since 8  July 2020. The facility is available to export -oriented 
projects whose annual export is equivalent to a minimum of USD  5 million or at least 50% of their 
sales con stituting exports, whichever is lower. Eligible sectors include textiles and garments, rice 
processing, leather and leather products, sports goods, carpets and wools, surgical instruments, 
fisheries, poultry and meat, fruits and vegetables (processing), ce reals, information technology (IT) 
and software services, marble and granite, gems and jewellery, engineering goods, ethanol, 
furniture, pharmaceutical products, glass, dairy, and soda ash. The maximum borrowing limit of an 
individual export -oriented proje ct is PKR 5 billion. As of end -June 2021, the outstanding amount 
under the LTFF was around PKR 253 billion.  
3.83.   The ILTFF follows the same eligibility criteria and conditions as the LTFF, except that the 
maximum financing available is PKR 2.5 billion. The rate  of return on the financing (mark -up) is 
based on Sharia principles. The scheme is available through Islamic banking institutions. Currently, 
eight Islamic institutions in the country provide this facility, and the outstanding amount under the 
facility was  nearly PKR 36 billion as of end -June 2021.  
3.84.   The EXIM Bank of Pakistan was incorporated as a public limited entity on 11  June 2015. It 
became operational with the passing of the Export -Import Bank of Pakistan Act, 2020, which is 
currently being reviewed by the Ministry of Law and Justice. The objective of the Bank is to promote 
expansion and diversification of the export base of Pakistan by providing short -term export credit 
facilities and long -term financing facilities for setting up export -oriented project s, as well as mitigate 
the risks faced by the business community in international trade. The Bank will provide short -term 
export credit (pre - and post -shipment), long -term financing, guarantees, export credit insurance, 
and other supporting services to exp orters under the regulatory ambit of SBP.  
3.3  Measures Affecting Production and Trade  
3.3.1   Taxation and incentives  
3.85.   During the review period, dependence on indirect tax revenue increased to over 63% of total 
tax revenue in 2020/21, from around 60% in 2014/15; the in crease has been driven almost entirely 
by the increase in the share of customs duty (Table 3.10).  
Table 3.10 Structure of federal tax revenue, 2014/15 -2020/21  
  2014/15  2015/16  2016/17  2017/18  2018/19  2019/20  2020/21a 
Total federal tax 
revenue (PKR  billion)  2,589.9  3,112.7  3,367.9  3,843.8  3,828.5  3,997.4  4,734.2  
% of GDP  9.4  10.7  10.6  11.1  10.1  9.6  9.9  
(% of total)  
Direct taxes  39.9  39.1  39.9  40.0  37.8  38.1  36.5 
Indirect taxes  60.1  60.9  60.1  60.0  62.2  61.9  63.5 
Customs duty  11.8  13.0  14.8  15.8  17.9  15.7  15.8 
Sales tax  42.0  41.9  39.5  38.6  38.1  39.9  41.9 
Excise duty  6.3  6.0  5.9  5.6  6.2  6.3  5.9 
a Budget estimate.  
Note:  Fiscal year = 1 July to 30 June.  
Source:  Finance Division (2021), Pakistan Economic Survey 2020 -21, Chapter 4. Viewed at: 
http://www.finance.gov.pk/survey/chapters_21/04 -Fiscal.pdf . 
3.86.   The tax regime continues to be complex on account of a multiplicity of taxes, numerous 
concessions and exemptions, and cumbersome procedures. These are further compounded by a 
large portion of the  economy being informal and thus outside the tax net. The authorities are 
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  unveiled in the 2021/22 Budget. The package aims at broadening the tax base, as well as r educing 
rates and concessions and exemptions (Sections 1.2.3.2 and 1.2.4.2).  
Sales tax  
3.87.   Under the Sales Tax Act 1990, Pakistan continues to levy sales tax at a rate of 17% 
(unchanged during the review period) on both imported and domestically produced goods . The 
Sixth Schedule of the Act provides are list of goods that are exempt from sales tax22, while the 
Eighth Schedule of the Act provides conditional exemptions. Furthermore, exemptions are also 
granted through SROs, which are permitted under Section 13 o f the Sales Tax Act 1990. It was 
estimated that revenue forgone through sales tax exemptions in 2020/21 stood at PKR 578 billion, 
an increase of nearly PKR 60 billion over the previous fiscal year.23 Furthermore, sales tax on services 
is a provincial matte r and is levied at rates ranging from 13% -16%.  
Excise duty/tax  
3.88.   Under the Federal Excise Act 2005, a number of products are subject to excise taxes at 
different rates, which are both ad valorem  and specific, and are detailed in the First Schedule of the 
Act. Excisable products include, inter alia , edible oils, aerated beverages, tobacco and tobacco 
products, cement, hydrocarbons (petroleum and gas), and automobiles. The Second Schedule of the 
Act provides a list of goods on which excise duty is collectible u nder sales tax mode with entitlement 
for adjustment with sales tax and vice versa; currently there are no excisable products detailed 
under the Second Schedule. The Third Schedule of the Act provides for conditional exemptions.24 
Furthermore, the Governmen t also issues SROs amending the applied excise duty rates and 
procedures governing the application of excise duty.  
Withholding tax  
3.89.   Withholding taxes are applicable on a multitude of payments made to resident taxpayers by 
withholding agents specified in the  local law (commonly known as "prescribed persons") and on 
payments to non -residents in connection with an income from a source in Pakistan. Furthermore, 
there is withholding tax on imports under Section 148 of Income Tax Ordinance 2001. The rates 
have sta yed the same since 2015. However, the nature of this tax has been changed from Final Tax 
to Minimum Tax under some conditions. The items on which this withholding tax is applicable are 
listed in Parts  I to III of the Twelfth Schedule of the Income Tax Ordi nance 2001.  
3.90.   Under the Ordinance, for non -residents who do not have a permanent establishment in 
Pakistan, withholding taxes are applicable on payments such as fees for technical services, royalties, 
dividends, interest, insurance premiums, and fees for dig ital services. The applicable withholding tax 
rate on such payments ranges from 5% to 20% subject to any relief permitted under a double 
taxation treaty; the rates are listed in Division IV of Part I of the First Schedule of the Income Tax 
Ordinance. The t ax withheld is deemed to be the final tax liability of the non -resident.  
Income tax  
3.91.   During the review period, the share of indirect tax revenue in total tax revenue rose. A 
plausible explanation could be the increased coverage of the tax base. Although thi s is a welcome 
development, Pakistan continues to have a narrow tax base reflecting, inter alia , income tax 
incentives and generous depreciation provisions. Corporate income tax rates in Pakistan vary from 
 
22 The Federal Government under Section 13(2)(a) of  the Act may grant exemptions, whenever 
circumstances exist to take immediate action for the purposes of national security, natural disaster, national 
food security in emergency situations , and implementation of bilateral and multilateral agreements, by 
notification in the Gazette  of Pakistan , exempt any supplies made or imports, of any goods or class of goods 
from the whole or any part of the tax chargeable under this Act, subject to the conditions and limitations 
specified therein.  
23 Haider, M. (2021), "C ost of Exemptions Increases Rs164bln in FY2021", The News International , 
11 June. Viewed at: https://www.thenews.com.pk/print/847710 -cost-of-exemptions -increases -rs164bln -in-
fy2021 . 
24 Federal Board of Revenue, The Federal Excise Act, 2005 (as Amended up to 11th March  2019). Viewed 
at: 
https: //download1.fbr.gov.pk/Docs/20196251065257874FEDERALEXCISEACT2005amendedupto11thmarch201
9.pdf. WT/TPR/S/424 • Pakistan  
 
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  35% for a banking company, 29% for all other enter prises, and 21% for small companies.25 SMEs 
also receive preferential tax treatment.26 For taxation purposes, SMEs are classified into the following 
two categories and taxed accordingly: (i)  Category 1: 7.5% of the taxable income, where annual 
business tur nover does not exceed PKR 100 million; or 0.25% of the gross turnover, where annual 
business turnover does not exceed PKR 100 million; and (ii)  Category 2: 15% of the taxable income, 
where annual business turnover is greater than PKR 100 million but less t han PKR  250 million; or 
0.5% of the gross turnover, where annual business turnover is between PKR  100-PKR 250 million. 
Preferential tax treatment is also accorded to "women enterprises". Such enterprises are defined as 
start-ups established on or after 1  July 2021 and whose shareholding is entirely held or owned by 
women. Women enterprises are taxed at a rate of 25% (Section 1.2.4.2).  
Incentives  
3.92.   In addition to assistance provided in the form of duty and tax concessions, as well as those 
under the EPZ scheme  (Section 3.2.4), Pakistan operates a number of incentive schemes that are 
both general in nature and sector -specific. Under the Investment Policy 2013, varying incentives are 
accorded to manufacturing and non -manufacturing sectors (Table 2.4).  
3.93.   The SEZ Act  2012 allows special economic zones (SEZs) to be set up by the Federal or 
Provincial Governments themselves or in collaboration with the private sector under different modes 
of public -private partnership or exclusively through the private sector (Section 2 .4.5). The fiscal 
benefits under the SEZ law include a one -time exemption from custom duties and taxes for all capital 
goods imported into Pakistan for the development, operations, and maintenance of a SEZ (both for 
the developer and the zone enterprise) a nd exemption from all taxes on income for a period of 10 
years. The provincial SEZ authorities, set up under the law, are required to move the applications 
received from developers to the Federal Board of Investment, which is to act as the secretariat to 
the Board of Approval and the Approval Committee. Currently, there are 24 SEZs that have been 
approved/notified; of these, 4 are part of the China Pakistan Economic Corridor (CPEC), and a further 
5 SEZs have been proposed as part of the CPEC (Sections 2.3.2 .3 and 2.4.5) . 
3.94.   In December 2020, the Government promulgated the Special Technology Zones Authority 
(STZA) Ordinance 2020. The Ordinance authorizes the STZA to "develop Special Technology Zones 
(STZs) across Pakistan, provide special incentives to attract i nvestors, builders, and technology 
companies to partner with the Government, and also provide a one -window facilitation to local and 
international companies in the STZs. Ultimately, the Authority aims to build knowledge ecosystems 
that will harness Pakista n's IT potential and set the country on the trajectory of an entrepreneurial, 
innovative, and tech -driven future for shared prosperity [and] inclusive growth".27 Incentives 
provided to STZs are exemption of income tax, customs duty, and property tax for a period of 10 
years for zone developers and zone enterprises. Zone developers and zone enterprises are exempt 
from sales tax on goods and services, and on import of plant and machinery, equipment, and raw 
materials for the consumption of these items within the zones. Venture funds investing in STZs are 
exempt from tax on dividend income and capital gains for a period of 10 years.  
3.95.   Pakistan also provides sector -specific incentives (Section 4.4.2.2). For the manufacture of 
electric vehicles (EVs), import of pla nt and machinery is exempt from customs duty, and no sales 
tax is levied on imports of complete knock -down (CKD) kits of EVs. Exemption of VAT has been 
granted on EV  four-wheelers up to 50  kWh battery (CKD), 150 kWh battery light commercial vehicles 
(LCVs)  (completely built unit (CBU)) until 30  June 2026, while 2 - and 3 -wheelers and HCV (CBU) 
until 30  June 2025 and inputs for EV vendors are exempted from custom duty.  
3.96.   With respect to the IT sector, income from export of IT is eligible for 100% tax credit sub ject 
to the condition that 80% of export proceeds are brought into Pakistan through normal banking 
channels; software exporters are allowed to retain up to 35% of their export earnings in Special 
Exporters Foreign Currency Accounts, which can be used for o perational expenses and overseas 
payments. An entity engaged in the export of IT and IT -enabled services that does not bring 80% 
 
25 A small company is defined as having paid -up capital plus undistributed reserves not exceeding 
PKR 50 million, employees not exceeding 250 at any time during the year , and an annual turnover not 
exceeding PKR 250 million.  
26 A SME is defined as a person wh o is engaged in manufacturing and who has  business turnover in a 
tax year that does not exceed PKR 250 million.  
27 STZA, About STZA . Viewed at: https://stza.gov.pk/about -stza/. WT/TPR/S/424 • Pakistan  
 
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  export proceeds into Pakistan is liable to pay income tax at a rate of 1%. Additionally, IT exporters 
also benefit from prefere ntial sales tax rates (these vary across provinces).  
3.97.   With a view to promoting the manufacture of mobile devices, the Government introduced the 
Mobile Device Manufacturing Policy 2020. Under the policy, plant, machinery, and equipment used 
for the manufacturing of mobile phones can be imported duty -free, as can CKD/semi knock -down 
(SKD) manufacturing by Pakistan Telecommunication Authority -approved manufactures under the 
IOCO -approved import authorization. There is no VAT on import of cellular mobil e phones  and locally 
assembled/manufactured mobile phones are exempted from withholding tax on domestic sales. 
Under the policy, an R&D allowance of 3% is given to local manufacturers for exports of mobile 
phones.  
3.98.   The Automotive Development Policy (2016 -2021) distinguishes between greenfield and 
brownfield investors. Greenfield Investment is defined as the installation of new and independent 
automotive assembly and manufacturing facilities by an investor for the production of vehicles of a 
make not already being assembled/manufactured in Pakistan. Incentives offered under this category 
include duty -free import of plant and machinery for setting up the assembly and/or manufacturing 
facility on a one -time basis, import of 100 vehicles of the same model in CBU form at 50% of the 
prevailing duty for test marketing after breaking ground on the project, concessional rate of custom 
duty of 10% on non -localized parts and 25% on localized parts for a period of five years for the 
manufacturing of cars and LCVs, and imp ort of all parts (both localized and non -localized) at 
prevailing customs duty rate applicable to non -localized parts for manufacturing of trucks, buses, 
and prime -movers for a period of three years.  
3.99.   Brownfield Investment is defined as revival of an existi ng assembly and/or manufacturing 
facility that is non -operational or that was closed on or before 1  July 2013, where the make is not 
in production in Pakistan since that date, and that the revival is undertaken either independently by 
the original owners o r new investors or under a joint venture agreement with a foreign principal or 
by a foreign principal independently through purchase of a plant. Incentives provided in this category 
include import of non -localized parts at 10% and localized parts at 25% fo r a period of three years 
for the manufacturing of cars and LCVs, and import of all parts (both localized and non -localized) at 
prevailing customs duty applicable to non -localized parts for manufacturing of trucks, buses, and 
prime -movers for a period of t hree years. There were two closed automotive plants in the country 
that were expected to be revived under the policy. However, they were unable to reopen due to 
internal issues.  
3.100.   Incentives are also provided to the pharmaceutical, food processing, housing and 
construction, logistics, textiles, and tourism sectors.  
3.3.2   Standards and other technical requirements  
3.101.   The Pakistan Standards and Quality Control Authority (PSQCA), which was established under 
the PSQCA Act 1996, continues to be the nat ional standardization body. The PSQCA is responsible 
for developing and adopting standards; providing conformity/testing assessments; and advising the 
Government on standardization policies, programmes, and activities to promote industrial efficiency 
and d evelopment, as well as consumer safety and health.  
3.102.   The PSQCA participates as a subscribing member in five international standardization 
organizations: the International Organization for Standardization (ISO), the International 
Electrotechnical Commission ( IEC), the International Organization for Legal Metrology (OIML), the 
WTO Committee on Technical Barriers to Trade, and the IEC System of Conformity Assessment 
Schemes for Electrotechnical Equipment and Components (IECEE). The PSQCA is also a member of 
regional standards organizations, including the South Asian Regional Standards Organization 
(SARSO), the Standards and Metrology Institute for Islamic Countries (SMIIC), and the ECO Regional 
Institute of Standardization, Conformity Assessment, Accreditation, a nd Metrology (RISCAM). The 
PSQCA also serves as the National Enquiry Point for the WTO Agreement on Technical Barriers to 
Trade (TBT Agreement).28 
 
28 Pakistan Standards and Quality  Control Authority , Activities . Viewed at: 
http://updated.psqca.com.pk/about -us/activities/ . WT/TPR/S/424 • Pakistan  
 
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  3.103.   As a member of ISO, the IEC, and the OIML, Pakistan continues to harmonize standards with 
international requi rements. As of June 2021, it had 22,648 standard specifications. This is a 
significant reduction from over 30,000 at the time of the previous Review, as some standards have 
been withdrawn, while others have been merged. Standards cover mainly agriculture, foodstuffs, 
chemicals, civil and mechanical engineering, and textiles. Of these, 16,516 are adopted standards 
(ISO, IEC/OIML, and the American Society for Testing and Materials ((ASTM)), and 6,132 are 
national standards that, according to the authorities, are often based on regional or UK standards. 
Additionally, Appendix N of the 2020 Import Policy Order lists 114  products subject to the 
Compulsory Certification Mark License Scheme that must meet Pakistani standards on human safety 
and public health at the  import stage.29 These are considered to be mandatory standards. These 
goods must have a Certification Mark issued by the PSQCA to be made, stocked, or sold domestically, 
and domestic manufacturers and exporters to Pakistan must be registered with the PSQC A to ensure 
compliance.  
3.104.   Imports are subject to the same national quality standards or regulations as similar 
domestically made goods.30 Imports and domestic goods undergo the same conformity testing 
procedures. The PSQCA has 47 registered inspection agenci es with valid certificates and 8 accredited 
laboratories undertaking quality control services.  
3.105.   After Pakistan signed the WTO Agreement in 1995, the Pakistan National Accreditation 
Council (PNAC) was established in 1998 under the administrative control of t he Ministry of Science 
and Technology. The PNAC Act was published in 2017. As the national apex body, PNAC's main 
objective is to accredit conformity assessment bodies (CABs) according to national and international 
standards, including testing and calibrat ion laboratories according to ISO/IEC  17025; medical 
laboratories according to ISO 15189; inspection bodies according to ISO/IEC 17020; certification 
bodies according to ISO/IEC 17021 -1; management system certificate including QMS (ISO 9001), 
EMS (ISO 1400 1); and new schemes like occupational health and safety (ISO 45001) and medical 
devices (ISO 13485). Since 2015, PNAC is also responsible for halal certification bodies according to 
PS:4992 and SMIIC -2, product certification bodies according to ISO/IEC 170 65 (scheme launched 
in 2015), and an accreditation scheme for GLOBALG.A.P launched in 2021.31 Additionally, 
accreditation for proficiency testing providers according to ISO/IEC 17043 was launched in 2015, 
and one for personnel certification according to IS O/IEC 17024 was launched in 2016.  
3.106.   PNAC accredits labs and certification bodies in Pakistan and abroad. PNAC is internationally 
recognized and has been performing accreditation for hundreds of CABs in the country. As of 
November 2021, PNAC has accredited mo re than 300  CABs, including 204 testing and calibration 
laboratories, 13  medical laboratories, 8 management certification bodies, 13 inspection bodies, 
8 halal certification bodies, 4 proficiency testing providers, 1 product certification body, and 
1 perso nnel certification body. During the review period, approximately 193 new accreditations were 
awarded and more than 100 are in the pipeline.  
3.107.   PNAC is a full member of the International Laboratory Accreditation Cooperation (ILAC) and 
the International Accredi tation Forum (IAF), and a signatory member of the Asia Pacific Accreditation 
Cooperation (APAC). PNAC has achieved Mutual Recognition Arrangement (MRA) signatory status 
for testing and calibration laboratories from ILAC and Multilateral Recognition Arrange ment (MLA) 
signatory status for quality management systems, environment management systems, and product 
certifications from the IAF. Furthermore, PNAC is the founding board member of the International 
Halal Accreditation Forum (IHAF) and a member of SMIIC.  By virtue of these recognitions, 
certificates/reports issued by accredited conformity bodies are accepted around the world.  
Additionally, Pakistan has concluded 11 MRAs with other countries.  
3.108.   Since 2015, Pakistan has submitted 124 notifications to the WTO under the TBT Agreement 
covering health and safety standards. The notifications mainly encompass sampling and testing 
procedures, as well as labelling, packaging, storage, and transport of a number of food and other 
 
29 The list includes a wide range of products, including, inter alia,  fruit juices, food for infant s, gas 
appliances, various cooking oils, cement -related products, LED lights, electrical goods mechanical items, 
chemicals, and cosmetic products.  
30 Import Policy Order 2020, Section 6(2).  
31 GLOBALG.A.P. is a brand of smart farm assurance solutions develop ed by FoodPLUS GmbH in 
Cologne, Germany, with cooperation from producers, retailers, and other stakeholders from across the food 
industry.  WT/TPR/S/424 • Pakistan  
 
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  products. During the review period, one specific trade concern was raised against Pakistan regarding 
labelling, shelf life, and halal certification in the TBT Committee meeting in November 2019.  
3.3.3   Sanitary and phytosanitary requirements  
3.109.   The Ministry of National Food Security and Research has overa ll responsibility for formulating 
and implementing animal/plant quarantine and regulating pesticides. The main laws governing SPS 
measures in Pakistan are the Agriculture Pesticide Ordinance 1971, the Pakistan Plant Quarantine 
Act 1976, the Pakistan Plant Quarantine Rules 2019, the Pakistan Animal Quarantine Ordinance 
1979, the Pakistan Animal Quarantine Rules 1980, and the Pakistan Fish Inspection and Quality 
Control Act 1997. As a member of Codex Alimentarius Commission, the World Organization for 
Animal Health (International Office of Epizootics), the International Plant Protection Convention 
(IPPC), and the Asia and Pacific Plant Protection Commission, Pakistan adheres to their provisions, 
as well as to FAO guidelines. Within the Ministry, the Department  of Plant Protection (DPP) is 
responsible for plant protection and quarantine, and the Animal Quarantine Department (AQD) is 
responsible for animal protection and quarantine. The Ministry is also designated as the national 
notification authority, while the  enquiry point related to plants is the DPP and for animals it is the 
AQD; all have been notified to the WTO.  
Plant quarantine and protection  
3.110.   The Pakistan Plant Quarantine Act 1976 read with the Pakistan Plant Quarantine Rules 2019 
(PPQR), the Import Polic y Order 2020, and IPPC and Codex Alimentarius guidelines govern imports 
of plants. Imports of regulated agricultural goods that fall under Category II, Category  III, or 
Category IV of international sanitary and phytosanitary measures of the IPPC are permit ted after a 
pest risk analysis (PRA) and an import risk analysis (IRA), as per Rule 10 of PPQR 2019 and IPPC 
guidelines. After finalizing a PRA, the DPP issues an import permit that details applicable 
phytosanitary measures required to be complied with bef ore the goods arrive in Pakistan. Goods 
falling under Category I of ISPM -32 of IPPC can be imported without a permit, phytosanitary 
certificate, or biosecurity clearance or plant protection release order. Import of certain goods from 
territories deemed hig h risk is either prohibited or restricted; the list of products and countries is 
detailed in Schedule I of the PPQR 2019, while Schedule II details the phytosanitary requirements 
for the importation of restricted or prohibited plants or plant material or r egulated goods or articles. 
Schedule III of the PPQR 2019 provides the procedure for permitted imports.  
3.111.   Under the legislation, import of any seed, including cotton seed, requires a permit (Controlled 
Import Permit) from the DPP. For first -time imports of c otton seed, the DPP allows a maximum 
quantity of 1 kg. After importation, the DPP tests for invasive and alien biosecurity risks in a DPP -
approved post -entry quarantine facility for one crop season. If the seed variety is cleared, the seed 
can be put throu gh Federal Seed Certification and Registration Department (FSCRD) trials prior to 
registration and entry in the Federal Seed Register. Once registered, seeds can be imported on a 
commercial basis. If the importable cotton seed is characterized as either a living modified organism 
(LMO) or a genetically modified organism (GMO), a licence from the Pakistan Environmental 
Protection Agency is also required. The National Biosafety Committee under the Ministry of Climate 
Change (MoCC) evaluates application for im port of LMO or GMO.  
3.112.   Pakistan has ratified the Cartagena Protocol of Biosafety, which came into force in May 2009. 
Pakistan maintains a framework of handling GMOs and LMOs, which requires: (i)  that the importation 
is only made for research and experimentati on purposes; (ii)  a valid licence from the Pakistan 
Environmental Agency, and (iii)  that the importer maintains a post -entry quarantine facility duly 
approved by the Department, (which shall be open to an authorized officer in the event of research 
or expe riments for inspection, and compliance audit at any reasonable time and  importation is made 
from the countries that maintain regular plant quarantine, inspection, testing, and certification 
services). These rules are also stipulated in the Pakistan Biosafe ty Rules 2005, which also govern 
requirements for domestic GMOs and LMOs.  
Animal quarantine and protection  
3.113.   Pakistan belongs to the Codex Alimentarius Commission and the International Office of 
Epizootics (OIE). The AQD administers the Animal Quarantine Ord inance 1979 and the Animal 
Quarantine Rules 1980. All imports of animal products must be accompanied by a valid veterinary WT/TPR/S/424 • Pakistan  
 
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  health certificate issued by the official veterinary authority of the exporting country, as well as 
compliance with sanitary conditio ns specified in the Import Policy Order 2020, the Animal Quarantine 
Act 1979, and Animal Quarantine Rules 1980. The AQD  approves imports of live animals, including 
animal semen and embryos, which must also be accompanied by quarantine certificates from the  
exporting country. Furthermore, as disease conditions change and differ over time, the AQD also 
consults with the national focal points for the OIE to ensure efficient and disease -free trade.  
3.114.   Under the Import Policy Order 2020 and the Animal Quarantine Ru les 1980, imports are 
prohibited from any territory where SAT 1, 2, or 3 of the Foot and Mouth Disease virus are considered 
to exist, as are those of fur skins and manufactures thereof (Section  3.1.5). Import Policy Order 
2020 also restricts the import of live animals, i.e.  cattle, buffalo, sheep, goats, and commodities of 
animal origin. These can only be imported from countries that have negligible bovine spongiform 
encephalopathy (BSE) risk. However, live poultry, day -old chicks, and other captive live bi rds (pet, 
game, wild, exotic, and fancy) can be imported from a territory that is not free from highly 
pathogenic avian influenza only after fulfilling additional certification requirements from the 
veterinary authority of the exporting country as detailed  in Import Policy Order 2020.  
3.115.   The Import Policy Order list of prohibited imports is updated during the year, at the request 
of the affected country, in line with OIE recommendations; Pakistan accepts the "disease free" status 
of countries according to OIE results. Live animals require a maximum 22 -day quarantine (minimum 
7 days if the quarantine officer is satisfied with their health status). The National Veterinary 
Laboratory provides international -standard testing facilities, according to authorities, and  works 
closely with provincial livestock services to analyse, monitor, plan, and formulate disease control 
and eradication programmes. According to the authorities, the Animal Quarantine (Import and 
Export of Animal and Animal Products) Rules 2021 have bee n submitted to the Cabinet for approval, 
and are expected to be implemented in 2022.  
Other foodstuffs  
3.116.   Foodstuffs consumed in the country of origin are generally permitted. Codex standards and 
regulations apply to imported food, including additives, preservatives, vitamins, and MRLs of 
contaminants, e.g. pesticides. MRLs apply to both imports and exports (c ontingent on the 
requirements of the importing country). To prevent imports of cheap dyes hazardous to health, only 
specified food colours can be imported, and each consignment must have a government certificate 
of use or registration in the exporting coun try (Import Policy Order 2020). Imported foodstuffs, 
including ingredients, must have at least 66% of the original shelf life left upon importation (Import 
Policy Order 2020). Additionally, the authorities state that drafting of Pakistan's food safety 
regulations and standards was in process at the Ministry of National Food Security and Research and 
the DPP.  
3.3.4   Marking, labelling, and packaging  
3.117.   There continues to be no uniform labelling and marking system in Pakistan, and there have 
been no relevant changes fr om the previous Review. However, individual industries or sectors are 
subject to the regulations of specific bodies – for example, the Ministry of National Health Services, 
Regulation and Coordination sets requirements for the pharmaceutical industry, and the Ministry of 
National Food Security and Research sets requirements for pesticides and edible products. 
Furthermore, labelling requirements are also prescribed under the Import Policy Order 2020, and 
these include, inter alia , that cigar and cigarette (o f tobacco or of tobacco substitutes) packets should 
carry the warning "Smoking is injurious to heath" in English and Urdu. Dyes and chemicals must be 
marked with a full description, including quality and code numbers. Food colours must carry fair and 
true labelling about the product in both languages. Edible products should show that they are free 
of haram elements or ingredients. In February 2019, the Government enacted an SRO that bans the 
import of processed food products without labelling in the local l anguage and a halal certification. 
This SRO32 was incorporated in Import Policy Order 2020, and the import of foodstuffs now requires 
labelling in English and Urdu as well as the halal certification logo.  
 
32 SRO 237 (1) 2019.  WT/TPR/S/424 • Pakistan  
 
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  3.3.5   Competition policy and price controls  
Competition p olicy  
3.118.   Competition policy in Pakistan continues to be governed by the Competition Act 2010, which 
is implemented by the Competition Commission of Pakistan (CCP). The Competition Act 2010 is a 
comprehensive piece of legislation that gives the CCP legal and i nvestigative authority to ensure free 
competition in the country, improve economic efficiency, and protect consumers from 
anti-competitive behaviour. The Act applies to both public and private sector entities and to all 
actions or matters that can affect c ompetition. However, Section 54 of the Act allows the Federal 
Government to exempt any class of undertaking or any agreement by notification in the Gazette of 
Pakistan. However, no such exemption has been granted to date. The Act prohibits undertakings 
from abusing a dominant position in the market, participating in anti -competitive agreements, and 
resorting to deceptive marketing practices that could result in a transaction based on incorrect or 
inaccurate information. It also reviews mergers between under takings that could result in significant 
impediments to effective competition.  
3.119.   Under the Act, the abuse of a dominant position is prohibited. The Act defines a dominant 
position as "the ability of one or more sellers in a market to behave to an appreciable  extent 
independently of competitors, customers, consumers, and suppliers, or if an undertaking's share of 
the relevant market exceeds 40%".33 Abuse of a dominant position includes practices such limiting 
production or sales, unreasonable price increases, price differentiation without objective 
justifications, tie -ins that make the sale of goods or services conditional on the purchase of other 
goods or services, predatory pricing, refusing to deal, and boycotting or excluding any other 
undertaking from prod ucing, distributing, or selling goods or providing any service. Furthermore, 
market -sharing and price -fixing agreements of any sort are also prohibited.  
3.120.   Prohibited agreements under the Act are those agreements or decisions between entities 
that result in p reventing, restricting, reducing, or distorting competition within the relevant market. 
Such agreements include, inter alia , market -sharing and price fixing of any sort; fixing quantities 
for production, distribution, or sale; limiting technical developmen ts; and collusive tendering or 
bidding and the application of dissimilar conditions. Deceptive marketing involves any advertising or 
promotional material that misrepresents the nature, characteristics, qualities, or geographic origin 
of goods, services, or  commercial activities, and is also prohibited under the Act. At present, Pakistan 
does not have a legal and institutional mechanism for consumers' rights. However, an Office of Fair 
Trade (OFT)  has been created within the CCP to oversee consumer protection issues.  
3.121.   A proposed merger or acquisition that meets the notification thresholds must be approved 
by the CCP.34 If the CCP determines that the pr oposed merger or acquisition would substantially 
lessen competition by creating or strengthening a dominant position in the relevant market, it can 
prevent the merger or acquisition, set conditions, or require divestitures. The Act does not 
distinguish bet ween horizontal and vertical mergers. The Act also covers joint ventures, as such they 
also require the CCP's approval if they meet the notification thresholds.  
3.122.   With respect to proceedings and enquiries, the CCP has the same powers as those of a civil 
court and its proceedings are considered a judicial proceeding. The Commission can levy penalties 
up to PKR 75 million or an amount not exceeding 10% turnover of the concerned undertaking. For 
non-compliance, the Commission can impose a fine up to PKR 1 millio n, and, in cases of continued 
violation of the Commission's order, the Commission can impose an additional fine amounting to 
PKR 1 million per day until such violation ends. However, the Commission cannot impose criminal 
penalty on its own.  
 
33 Competition Act 2010, Sections 1 and 3.  
34 A pre -merger application to the Commission is necessa ry when one party has assets of 
PKR 300 million or the parties have a cumulative asset base of PKR 1 billion, or one party has an annual 
revenue of PKR 500 million or the parties have a cumulative revenue of PKR 1 billion, and the transaction value 
is PKR 100 million or more, or one party acquires 10% or more voting rights in another party through the 
acquisition of shares. If any one of the first two thresholds is met, the Commission looks at whether any of the 
third or fourth thresholds is met. If yes, the parties must file a pre -merger application, provided one or both 
parties do business in Pakistan.  WT/TPR/S/424 • Pakistan  
 
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  3.123.   Since its incep tion in 2010, the CCP has imposed penalties amounting to nearly 
PKR 30 billion, and it has cleared nearly 860 mergers -acquisitions -joint ventures, and given 
exemptions to 905 agreements.35 
3.124.   Furthermore, since July 2020, the Commission's Cartels and Trade Ab uses Department has 
initiated nine inquiries, of which six have been completed. It also conducted four search -and-
inspections in the sugar, cement, and poultry industries, as well as on the Oil Companies Advisory 
Council (OCAC) in the energy sector to gath er evidence on a possible price -fixing decision by the 
association. With regards to consumer protection, the OFT completed nine inquiries and started 
five new ones. The Commission imposed a penalty of PKR 150 million on a company for deceptive 
marketing. Additionally, the CCP issued two key policy recommendations in the period. The first  was 
sent to the federal and provincial governments in August 2020 to address the issue of distortion in 
the wheat sector, resulting in a supply shortfall and provision of s ubstandard wheat flour to 
consumers. The second stemmed from the decision of the Government of Punjab to fix the maximum 
retail price of sugar in April 2021. The CCP argued that instead of fixing the sugar price, the 
Government should deregulate the sugar industry to promote free trade mechanisms where price 
signals can be effectively conveyed to all stakeholders. This would help attract investment, 
encourage a focus on R&D, increase competitiveness, and reduce distortions in local supply.  
Price controls  
3.125.   With a view to curbing inflation and ensuring the supply of essential commodities at 
affordable prices, the Government issued the Price Control and Prevention of Profiteering and 
Hoarding Order 2021 in August 2021, which is based on the Price Control and Pre vention of 
Profiteering and Hoarding Act, 1977.36 Under the Order, the Government has the authority to fix and 
structure maximum prices for 50 goods deemed essential in the case of an "uncontrolled price hike", 
these include, inter alia , tea, milk, sugar, edible oils, meat and wheat, and industrial and agricultural 
inputs ranging from caustic soda, soda ash, cement, automobiles, tractors, chemicals like pesticides 
and fertilizers, steel, and cotton lint. A situation of an uncontrolled price hike is defined as an average 
increase of 33% or more in the prices of a particular commodity from the preceding year. In such a 
case, district administration officials have the power and authority to enter and search any premises 
of any trade association and verify infor mation provided by such association, as well as to fix the 
price.  
3.126.   Furthermore, under the Order, prices of the commodities are to be fixed using a cost -plus 
method in consultation with the representatives of key producers and their associations. This would 
entail that the producers can pass the rising cost of doing business to consumers on account of 
increasing domestic and other prices or global commodity (raw material) prices. In September 2021, 
the price of crystalline white sugar was fixed at PKR 89.75/k g based on the cost -plus method using 
data provided by the Sugar Mills/Pakistan Sugar Mill Association, the Provincial Government, and 
other stakeholders including Federal Ministries of Industries and Production.37 Additionally, regarding 
the price of whea t, the Ministry of National Food Security and Research has submitted a summary 
to the Federal Government on fixation of minimum support price of wheat for the 2021/22 crop. In 
this context, various consultation meetings with the provinces have been carried  out to agree on a 
uniform price policy across the provinces.  
3.3.6   State trading, state -owned enterprises, and privatization  
3.3.6.1   State trading  
3.127.   Pakistan notified the WTO in April 2021 that it had no state trading enterprises within the 
meaning of Article  XVII:4(a) o f the GATT  1994 and noted that existing state firms are not granted 
 
35 Since 2015, 474 mergers -acquisitions -joint ventures have been cleared, while over the same period 
415 agreements have been given exemptions.  
36 Governmen t of Pakistan, Industries and Production Division, Notification SRO 1062(I)/2021 , 
24 August 2021 . Viewed at: 
http://www.m oip.gov.pk/userfiles1/file/Rules%20under%20the%20Price%20Control%20Act%202021%20(KA
A-HA)%20FINAL -FINAL.pdf ; and Notification SRO 1065(I)/2021, Schedule , 24 August  2021. 
http://www.moip.gov.pk/userfiles1/file/Rules%20under%20the%20Price%20Control%20Act%202021%20(KA
A-HA)%20FINAL -FINAL1.pdf . 
37 Ministry of National Food Security and Research , Notification SRO 2369(l)/2021, 21  September 2 021. WT/TPR/S/424 • Pakistan  
 
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  any exclusive or special rights (including statutory or constitutional powers) allowing them to 
influence the level and/or direction of foreign trade.38 
3.128.   The public sector is involved in trading primarily through the Trading Corporation of Pakistan 
(TCP), which is the principal trading arm of the Government. It is a private limited company under 
the administrative control of the MoC. Through private compani es, it trades various products on 
behalf of the Government, including importing essential commodities for socio -political reasons in 
case of domestic shortages. The TCP has no import monopoly or exclusive trading rights, pays full 
taxes and tariffs on impo rts, and follows Public Procurement Regulatory Authority rules. During the 
period from July 2015 to June 2021, the TCP has imported 350,000 MT of urea, 1,701,399  MT of 
wheat, and 130,563 MT of sugar. ln addition, the TCP procured 50,000 MT of rice and 95,6 99 bales 
of cotton from the local market.  
3.3.6.2   State -owned enterprises and privatization  
3.129.   State involvement in the economy remains prevalent. Revenues of SOEs in 2018/19 were 
approximately PKR 4 trillion, which amounted to about 10% of nominal GDP and the book v alue of 
their assets was PKR  19 trillion. Furthermore, SOEs provided employment to more than 
450,000  people, around 0.8% of the total workforce. As of March 2021, there were 212  SOEs 
incorporated by the Government (85 commercial SOEs, 44  non-commercial SOE s, and 83 
subsidiaries of commercial SOEs). Commercial SOEs mainly operate in 7 sectors: power (20); oil 
and gas (8); infrastructure transport and communication (12); manufacturing, mining and 
engineering (14); finance (18); industrial estate development a nd management (4); and wholesale, 
retail and marketing (9).  
3.130.   Despite their role in providing essential public goods and services, SOEs have been incurring 
considerable losses and remain a significant burden on the Government's finances (Chart 3.4) as 
well a s on allocation of resources (Section 1.2.4.3). As part of a part of IMF EFF 2019 -22 structural 
benchmarks, the Government has undertaken a comprehensive review of existing SOEs for the 
purpose of categorizing these for retention, privatization, and liquid ation.  
Chart 3.4 SOEs net profit/(loss), 2013/14 -2018/19  
(PKR billion)  
 
Source:  Ministry of Finance.  
3.131.   Among the SOEs  examined, 25 that were performing core functions were profitable.39 Of 
these, only four were considered financially viable according to the Government's criteria. As such, 
the financial performance of those entities not considered financially viable would  be addressed 
through institutional reforms to be undertaken, including governance improvement through an 
Ownership and Management Policy for SOEs, operationalization of the Central Monitoring Unit in the 
Finance Division, and the introduction of an SOE Bi ll in Parliament. Furthermore, there are 14 entities 
 
38 WTO document G/STR/N/18/PAK, 6  April 2021.  
39 Core functions are ensuring national food security, developing and managing large -scale 
infrastructure requiring substantial investments, national defence and security -related entities, entities  
established through government -to-government  or intergovernmental arrangements, and entities supplying 
goods and services of national economic interest . 
-300-200-1000100200
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19(PKR billion)Chart 3.[PAK]   SOEs net profit/loss, 2013 -19WT/TPR/S/424 • Pakistan  
 
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  that are incurring losses, which the Government plans to retain as they also perform core functions. 
However, these require immediate reforms and possible restructuring. Among these, Pakistan 
Railways an d Pakistan International Airlines are already under an active restructuring and reform 
process.  
3.132.   Currently, there are 10 SOEs on an active privatization list and are at various stages of the 
process (Section  1.2.4.3) (Table 3.11). A further 24 have been ide ntified for privatization 
(Table  3.12), while consultations with line ministries have already been initiated with respect to 
10 SOEs that are considered potential privatization candidates. (Table  3.13).  
Table 3.11 Entities under privatization  
 Entity  Financial 
implication 
net profits 
(loss) 
2018/19 
PKR 
million  Finan -
cial 
Ad-
visor 
hiring  Due 
diligence  Transactions 
structure  Invitation and 
prequalification 
of investors  Bidding 
process  Financial 
closure  
1 Pakistan Steel Mills 
Corporation 
(Private) Limited  (16,550)  √ √ √    
2 SME Bank  (1,073)  √ √ √ √   
3 GENCO -III: 
Northern Power 
Generation 
Company Limited, 
Thermal Power 
Station, 
Muzaffargarha (694)        
4 First Women Bank 
Limited  247 √ √ √    
5 Pakistan 
Reinsurance 
Company Limited  690 √ √ √    
6 State Life Insurance 
Corporation  2,011  The process is contingent upon corporatization.  
7 House Building 
Finance Company 
Limited  2,762  √ √ √    
8 GENCO -II: Central 
Power Generation 
Company Limited, 
Thermal Power 
Station, Guddo  3,517  Hiring of FA is under process.  
9 Pakistan Petroleum 
Limited (PPL)  59,459  The process for hiring of FA has been initiated.  
10 Oil and Gas 
Development 
Company Limited 
(OGDCL)  118,386  The process for OGDCL will be initiated after PPL's FA is on board.  
a  GENCO -III comprises: (i) SPS Faisalabad; (ii) GTPS Faisalabad; (ii) TPS Muzaffargarh; and (iv) TPS 
Nandipur . Privatization Commission is currently processing privatization of TPS Nandipur, FA has 
completed Due Diligence (DD), and DD has been shared with stakeholders for review.  
Source:  Ministry of Finance.  
Table 3.12 SOEs to be privatized  
 Entity  Financial implication net profits 
(loss) 2018/19 PKR million  
Distribution companies (DISCOs)  
1 Quetta Electric Supply Company Limited  (36,832)  
2 Lahore Electric Supply Company Limited  (31,622)  
3 Peshawar Electric Supply Company Limited  (29,263)  
4 Multan Electric Power Company Limited  (22,782)  
5 Sukkur Electric Power Company Limited  (10,956)  
6 Faisalabad Electric Supply Company Limited  (8,057)  
7 Islamabad Electric Supply Company Limited  (7,593)  
8 Hyderabad Electric Supply Company Limited  (6,753)  
9 Tribal Electric Supply Company Limited  4,309  
10 Gujranwala Electric Power Company Limited  6,496  WT/TPR/S/424 • Pakistan  
 
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   Entity  Financial implication net profits 
(loss) 2018/19 PKR million  
Generation companies (GENCOs)  
11 GENCO -I: Jamshoro Power Company Limited  (1,613)  
12 National Power Parks Management  18,993  
13 GENCO -IV: Lakhra Power Generation Company Limited  1,955  
14 State Petroleum Refining & Petrochemical Corporation  .. 
Manufacturing, Mining and Engineering  
15 Pakistan Textile City  (342)  
16 Telephone Industries of Pakistan  (100)  
17 State Engineering Corporation (Pvt) Limited  (10) 
18 Saindak Metals Limited  732 
19 Pakistan Mineral Development Corporation (Pvt) Limited  294 
20 Lakhra Coal Development Company Limited  3 
Wholesale, Retail and Marketing  
21 National Fertilizer Corporation of Pakistan (Pvt) Limited  583 
Real Estate Development and Management  
22 Export Processing Zones Authority  182 
23 National Construction Limited  2 
Financial Institutions  
24 National Insurance Company Limited  1,867  
.. Not available.  
Source:  Ministry of Finance.  
Table 3.13 Potential privatization candidates  
 Entity  
1 Zarai Taraqiati Bank Limited  
2 National Investment Trust Limited  
3 Sui Southern Gas Company Limited  
4 Sui Northern Gas Pipelines Limited  
5 Utility Stores Corporation (Private) Limited  
6 Pakistan Expo Centers (Pvt) Ltd.  
7 Pakistan Environmental Planning & Architectural Consultants (Private) Limited  
8 National Engineering Services Pakistan (Private) Limited  
9 Overseas Employment Corporation (Private) Limited  
10 Pakistan Tourism Development Corporation  
Source:  Ministry of Finance.  
3.133.   With a view to better managing SOEs , the Government submitted an SOE Bill to Parliament 
in April 2021. The proposed law shall introduce structured governance reforms in the management 
and oversight of SOEs. Additionally, the Government has started working on an SOE Ownership and 
Management Policy. The Policy would aim to manage SOEs through a coherent and institutionalized 
arrangement, which would include clarity on the ownership rationale of SOEs; the role of the 
Government as shareholder and the manner of the exercise of the ownership func tion; the respective 
roles and responsibilities of the Government, line ministries, and boards of SOEs; frameworks of 
competitive neutrality and public sector obligation; and necessary reporting and decision -making 
processes.  
3.3.7   Government procurement  
3.134.   Pakista n became an observer to the WTO plurilateral Agreement on Government 
Procurement in February 2015. There are no government procurement provisions in any of its FTAs. 
Government procurement continues to be governed by the Public Procurement Regulatory Autho rity 
Ordinance 2002 and the associated Public Procurement Rules 2004 (PPRA rules).40 The Ordinance 
and the Rules are administered by the Public Procurement Regulatory Authority (PPRA), an 
autonomous body responsible for recommending laws and regulations go verning public procurement 
and monitoring the application of procurement laws and performance of federal procuring agencies. 
The PPRA does not have jurisdiction over sub -federal procurement schemes, but provincial 
governments have created regulatory author ities on the same lines as the PPRA and introduced 
public procurement rules that are similar in scope and coverage to federal rules.  
 
40 Public Procurement Regulatory Authority. Viewed at: http://www.ppra.org.pk/ . WT/TPR/S/424 • Pakistan  
 
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  3.135.   Complaints with respect to government procurement decisions are addressed to the 
procurement committees established within each government agency. The procurement committees 
follow PPRA guidelines when making their decisions. In the final instance, aggrieved parties not 
satisfied with the committee's decision can file an appeal in the relevant court of jurisdiction. 
According to the authorities, approximately 350 appeals are filed annually. Additionally, at the time 
of the previous Review, the PPRA had launched a National Procurement Strategy 2013 -2016, which, 
outlined a common vision for making procurement processes efficient and transparent. During the 
review period, initiatives taken under the strategy included updating rules and regulations in 2020 
and 2021, automating the procurement system through e -procurement, and developing a capacity -
building policy in 2019 with an obj ective to create, enhance, and develop institutional capacity in 
procurement at country level.  
3.136.   During the review period, a significant change to PPRA rules was approved in July 2021. 
Under the amendment, "A procuring agency may engage in direct contractin g with state -owned 
entities such as professional, autonomous or semi -autonomous organizations or bodies of the federal 
or provincial governments for the procurement of such works and services, including consultancy 
services, which are time -sensitive and in  the public interest".41 Additionally, PPRA rules were 
amended in 2020 to accommodate e -procurement methods. The PPRA Ordinance was also amended 
in 2020 and now covers the disposal/sale of public assets. However, the authorities state that the 
Ordinance wa s valid for only 120 days and had now expired. As such, they have developed new rules 
and regulations for the disposal of public assets, and these had to be notified by Parliament.  
3.137.   The main procurement method continues to be open competitive bidding and is  used for all 
tenders above PKR 500,000. Tenders between PKR  0.3 million to PKR 3 million must be advertised 
on the PPRA website; higher tenders also need to be advertised in at least two national newspapers 
(one in Urdu and one in English). Pre -qualificat ion of bidders must be based on ability to perform 
satisfactorily. Direct and negotiated contracting42 are permitted subject to prescribed conditions; 
direct tendering is allowed when no advantage is envisaged from competitive bidding or where 
proprietary rights are involved.  
3.138.   Bidding is open to any nationality, and procuring agencies can provide supplier price 
preferences where this is government policy. Price preferences of up to 25% are in place on all 
government purchases depending on domestic value -added content; the maximu m preference 
requires at least 35% domestic value -added. During the review period, the PPRA issued a total of 
1,674 tenders valued at PKR 50 million or above, of these 324 were issued to foreigners (Table  3.14).  
Table 3.14 Government procurement yearly contracts PKR 50 million and above, 
2015/16 -2020/21  
Financial year  National contracts  
PKR 50 million and above 
(local bidders)  International contracts  
PKR 50 million and above 
(foreign bidders)  Total  
contracts 
uploaded  
2015/16  124 68 192 
2016/17  178 43 221 
2017/18  182 14 196 
2018/19  236 75 311 
2019/20  199 50 249 
2020/21  431 74 505 
Total  1,350  324 1,674  
Note:  Financial year = 1  July to 30 June.  
Source:  Public Procurement Regulatory Authority, Summary Report for the Period 2015 -2021. 
3.3.8   Intellectual property rights  
3.139.   Pakistan provides intellectual property protection under various laws (Table 3.15), which 
have been notified to the WTO. Pakistan has been a memb er of the World Intellectual Property 
Organization (WIPO) since 1977, and is a party to the Berne Convention for the Protection of Literary 
 
41 Public Procurement Rules 2004  rule (42) clause (f).  
42 According to the authorities , negotiated contracting takes place when urgent procu rement is required, 
if something cannot be found through a tender process , or when a good is made by one specific entity.  WT/TPR/S/424 • Pakistan  
 
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  and Artistic Works, the Paris Convention for the Protection of Industrial Property, and most recently 
(May 2021) the  Protocol Relating to the Madrid Agreement Concerning the International Registration 
of Marks. Pakistan has also signed the Universal Copyright Convention, and accepted the amendment 
to the Agreement on Trade -Related Aspects of Intellectual Property Rights  (TRIPS Agreement) on 
Public Health. Pakistan promulgated the Plant Breeders Rights Act in 2016.  
Table 3.15 Overview of IPR legislation, 2021  
IPR Main legislation  Duration of 
protection  Minimum duration of 
protection under TRIPS  
Copyright  Copyrights Ordinance 1962 as 
amended in 1992 and 2000  Life of author plus 
50 years  Life of author plus 
50 years  
Patents  Patents Ordinance 2000, Patents 
Rules 2003  20 years from the date 
of grant  20 years from date of 
filing 
Trademarks  Trademarks Act 1940, Trademarks 
Ordinance 2001, Trademark Rules 
2004 10 years, renewable 
indefinitely for periods 
of 10 years  At least 7 years; 
renewable indefinitely  
Geographical 
indications  Geographical Indications 
(Regis tration and Protection) Act 
2020 10 years, renewable 
after each 10 years  Indefinitely  
Integrated 
circuits  Registered Layout -Design of 
Integrated Circuits Ordinance 2000  10 years from the date 
of filing  10 years from first 
commercial exploitation  
Plant 
breeders 
rights  Plant Breeders Rights Act 2016  20 years from the date 
of filing and 25  years 
for trees and vines  20 years from the date of 
filing and 25 years for 
trees and vines  
Industrial 
designs  Design Ordinance 2000  
 10 years, renewable 
for two  periods of 
10 years  At least 10 years  
Source:  Intellectual Property Organization of Pakistan.  
3.140.   Intellectual property laws in Pakistan are administered by the Intellectual Property 
Organization of Pakistan (IPO), an autonomous organization under the admini strative control of the 
MoC since 2016. The IPO was created under the Intellectual Property Organization Act 2012, which 
provides a funding structure and vests the IPO with enforcement authority. The Act also provides 
for the establishment of dedicated IP Tribunals to exercise exclusive jurisdiction over intellectual 
property cases.  
3.141.   During the current review period, the registration of different IPRs has increased 
considerably (Table 3.16). Between 2014 -21 the authorities collected nearly PKR  2.8 billion in  
IPR-related revenue.  
Table 3.16 Applications and registrations of IPRs, 2014/15 -2018/19  
 
Patents  Trademarks  Industrial designs  Copyright  
App. Reg. App. Reg. App. Reg. App. Reg. 
2014/15  873 192 27,160  9,544  520 177 3,991  970 
2015/16  858 128 33,577  6,659  478 401 3,668  1,005  
2016/17  811 194 36,051  7,884  512 339 6,500  1,437  
2017/18  775 207 37,804  16,068  616 433 7,081  1,367  
2018/19  887 238 36,015  29,274  478 372 5,032  1,727  
Source:  Information provided by the authorities.  
3.3.8.1   Industrial property  
3.3.8.1.1   Patents  
3.142.   Patents are granted for a period of 20 years from the date of filing. The filing fee for patent 
applications is PKR 6,750; for each additional page of specification beyond 40 pages there is a fee 
of PKR 90, and one of PKR 225 for each additional claim beyond 20 claims. After four years, the 
owner must pay a renewal fee of PKR 12,000 for every year up to the eighth year, PKR 18,000 for 
years 9 -12, PKR 24,000 for years 13 -16, and PKR 3 2,000 for every year thereafter. A patent attorney 
is required for patent applications by foreigners. The authorities state that the average time for WT/TPR/S/424 • Pakistan  
 
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  patent -related registration is between 24 and 30 months. Furthermore, no compulsory licence has 
been issue d for pharmaceuticals or any other inventions since 2015.  
3.3.8.1.2   Trademarks  
3.143.   Registration of trade and services marks under the Trademarks Ordinance 2001 is through 
the Trademarks Registry (TMR), an office under the IPO. A trademark registration gives exclusive 
proprietary rights to the rights' holder for protection of their trademark perpetually, subject to 
renewal of the registration every 10 years. To register a mark, the holder needs to submit an 
application to the TMR accompanied by an application fee of PKR 3 ,000. The TMR generates an 
examination report and allows for a period of two months for any opposition to the mark. In case of 
no opposition, the mark is recommended for registration.  
3.3.8.1.3   Geographical indications  
3.144.   Pakistan enacted the Geographical Indications ( Registration and Protection) Act 2020 in 
March  2020. Under the Act, geographical indications are defined as "such goods as agricultural 
goods, natural goods or manufactured goods originating or manufactured or produced in a territory 
or a region or localit y as determined by the country, where a given quality, reputation or other 
characteristics of the goods or the ingredients or components, is essentially attributable to its 
geographical origin and in the case of manufactured goods one of the activities of either the 
production or processing or preparation of the goods concerned takes place in such territory, region 
or locality as the case may be".43 The Act establishes a Geographical Indications Registry (GIR), 
which is to be operated by the TMR until a sep arate GIR is created. The Act also allows for a 
geographical indication of a foreign country to be registered in Pakistan as long as it is registered in 
accordance with the local legislation in its country of origin.  
3.145.   Since the promulgation of the Geographi cal Indications (Registration and Protection) Act 
2020, the Government has notified 65 GIs under the Act.44 
3.3.8.1.4   Industrial design and layout -designs of integrated circuits  
3.146.   Industrial designs and layout -designs of integrated circuits continue to be protected un der 
the Registered Design Ordinance 2000, which provides a mechanism for priority claiming between 
all Members of the WTO. Any person who has applied to register a design in a WTO Member 
(convention country) is entitled to make an application for the regis tration of the same design in 
Pakistan within six months of the date of the application in a convention country. Similarly, any 
person who has filed an application for registration in Pakistan is entitled to claim that the official 
date of the Pakistani ap plication for any registration also holds in other WTO  Members.  
3.147.   Under the Ordinance, i ndustrial designs can be registered for a period of 10 years from the 
date of the first commercial exploitation anywhere in the world and may be extended twice for 
additi onal 10 -year periods. However, registration for integrated circuits is for a non -extendable 
10-year period. Any person claiming to be the proprietor of any new or original design not previously 
published anywhere in the world may apply for the registration  of such design in Pakistan. The 
application fee for registration of industrial designs is PKR 450, and the registration certificate is an 
additional PKR 750.  
3.3.8.1.5   Plant breeders' rights  
3.148.   In compliance of the Article  27.3(b) of the WTO TRIPS Agreement, the Plant  Breeders Rights 
(PBR) Act 2016 was promulgated by the Parliament and notified on 8  December  2015. Similarly, 
Plant Breeders Rules 2018 were notified in May 2018, providing for protection of new plant varieties. 
For implementation of the Plant Breeders Rig hts Law, a Plant Breeders Rights Registry was set up 
under the Ministry of National Food Security and Research.  
 
43 Geographical Indications (Registration and Protection) Act, 2020, Chapter 1(vii).  
44 Intellectual Property Organization of Pakistan, Notified GIs of Pakistan . Viewed at: 
https://ipo.gov.pk/gi_notifiedGIs . WT/TPR/S/424 • Pakistan  
 
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  3.3.8.2   Copyrights  
3.149.   Duration of copyright protection is lifetime of the author plus 50 years. Copyright protection 
covers literary, artistic, computer programs and software, cinematographic, and recorded works. 
Registration is not a condition of copyright protection, although  it establishes prima facie  evidence 
in court of the validity of the copyright and of the facts stated in the registration certificate.  
3.150.   After filing the application, the Copyright Office, under the IPO, carries out an examination. 
For artistic works, the a pplicant is required to advertise the work in any local newspaper. If there is 
no opposition, the registration certificate is issued for an application fee of PKR 2,000 (literary work 
other than computer programs and software), PKR 5,000 (computer programs  and software), 
PKR 2,000 (artistic work), PKR 6,000 (artistic work used or capable to be used or associated with 
goods and services), PKR 10,000 (cinematographic work), and PKR 2,000 (recorded and musical 
work including videos).  
3.3.8.3   Enforcement  
3.151.   During the rev iew period, the regulatory and institutional framework for IP enforcement was 
strengthened45, and IP enforcement improved. In addition to those in Karachi, Lahore, and 
Islamabad, IPR Enforcement Coordination Committees were established in Peshawar, Quetta,  Gilgit, 
Multan, Sukkur, Faisalabad, and Sialkot. These committees hold regular meetings to discuss 
enforcement issues and also provide training and capacity -building for law enforcement agencies to 
enable more effective IPR enforcement. Additionally, thre e IP tribunals were established in Karachi, 
Lahore, and Islamabad as mandated under the IPO Act 2012.  
3.152.   The digitization of data at the trademark and copyright registries and their use by the FBR 
seemingly led to increased seizures of pirated and counterfeit  goods at the borders. During the 
review period, significant progress was made against counterfeit goods and online piracy: Pakistan 
Customs implemented new IPR (Import & Export) Enforcement Rules 2017 that allow the officers of 
Pakistan Customs to take " suo moto"  action against the counterfeit/infringed goods. Additionally, 
Sections 26 and 31 the Prevention of Electronic Crime Act 2016 are also being used in disabling the 
online infringing content. Furthermore, the Pakistan Electronic Media Regulatory Auth ority (PEMRA) 
is also addressing the issue of signal piracy. It has issued various circulars/notifications to 
broadcasters, warning them to use licensed content and comply with copyright laws of Pakistan.  
3.153.   The Pakistan Telecommunication Authority (PTA) is a lso dealing with the matters related to 
online piracy. It has issued directives to telecom and Internet Service Providers (ISPs) to comply 
with copyright laws of Pakistan, and the Federal Investigation Agency (FIA) has established a Special 
Directorate for  IP Crimes. It is also responsible for implementing the Prevention of Electronic Crime 
Act 2016, which enables the Agency to protect online copyrighted content. Accordingly, the FIA also 
established a National Response Centre for Cyber Crimes.  
3.154.   In terms of enforcement, the IPO coordinates closely with the police, the FIA, and Customs; 
in this regard, specific guidelines have been issued. Pakistan has continued its efforts to advance 
IPR enforcement through raids, seizures, and arrests by various enforcement authorities. However, 
enforcement officials do not exercise ex officio authority without a formal complaint by a rights' 
holder. During the review period, 1,867 IPR -related cases were registered, of which 1,641 were 
resolved, and 226 remain pending.  
 
 
 
 
45 In 2016, the USTR in its 301 Report moved Pakistan from its priority watchlist to its watchlist.  WT/TPR/S/424 • Pakistan  
 
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  4  TRADE POLICIES BY SECTOR  
4.1.  The agriculture sector continues to play a key role in GDP and employment, while its labour 
productivity remains much lower than in other sectors. The Government uses a wide range of policy 
tools, both at the border and domestically, to facilitate its deve lopment. At the border, tariffs peak 
at 90% (93.6% when ad valorem  equivalents (AVEs) are included), and the average applied MFN 
tariff protection for agricultural goods is higher than for non -agricultural goods. Regulatory duties, 
Statutory Regulatory Ord ers (SROs), import/export restrictions, input subsidies, support prices, and 
tax deductions and exemptions all continue to be applied. Pakistan remains a net fish exporter and 
is rich in marine fishery resources. Border protection for fisheries mainly take s the form of tariffs, 
which were raised during the review period.  
4.2.  The mining and quarrying sector has been contracting recently. One of the goals of the national 
mineral policy is to encourage small -scale mining, where preferences are given to Pakistani 
nationals. Pakistan relies heavily on imported energy, particularly oil and gas. The Government is 
committed to phasing out coal -fired power plants and to increasing the share of renewable energy. 
SOEs continue to play a major role in the energy sector. Pri ces are often regulated (for hydrocarbons 
and electricity), while cross -subsidization continues.  
4.3.  Manufacturing remains the third -largest sector in GDP terms, after services and agriculture. 
The Government encourages the exportation of manufactured products  by providing various 
incentives, including the removal of regulatory duties and additional customs duties, as well as a 
duty drawback scheme.  
4.4.  During the review period, the contribution of services to GDP rose slightly (from 54.9% in 
FY2014/15 to 56.2% in 2020/21). Compared with other sectors, the services sector was affected 
the most by the COVID -19 pandemic. In 2020/21, the financial services sector remained resilient. 
The banking sector showed strong financial soundness, with robust solvency ratios, alth ough the 
non-performing loan ratio went up. Growth momentum in the telecom sector continued, and the 
mobile subsector was the main contributor. Against a background of having an unbalanced transport 
sector, a lack of coherent institutional framework, and l egislation that is not up to date, the 
Government issued its National Transport Plan 2018, followed by a Shipping Policy and a National 
Aviation Policy in 2019. Tourism was affected severely by the pandemic. In 2018, the Government 
launched its Digital Pak istan Policy, and one year later, it issued the E -Commerce Policy, with a view 
to increasing the competitiveness of local e -commerce players, in particular small and medium -sized 
enterprises (SMEs), and thus enhancing their share in local and global trade.  
4.5.  No minimum investment requirement or upper limit on the share of foreign equity  is require d 
in various sectors of the economy, with the exception of agriculture, airlines, banking, and media 
sectors.  
4.1  Agriculture and Livestock  
4.1.1   Main features and recent developments  
4.6.  Pakistan's agriculture sector (including crops and livestock) contributed around 25.7% to the 
gross value -added (GVA)  in FY2020/21 (Table 1.2). Around 64% of the population (136  million) lives 
in rural areas.1 Accordi ng to the 2017 -18 Labour Force Survey conducted by the Pakistan Bureau of 
Statistics, 39% of the country's labour force is engaged in agriculture (30.2% males and 67.2% 
females). Labour productivity in agriculture is much lower than in other sectors.  
4.7.  Out o f a total area of 79.6 million hectares, 28% (22.1 million hectares) is cultivated; the rest 
of the territory is composed of culturable waste, densely populated forests, and rangelands. Rural 
areas are characterized by strong inequality in the distribution  of assets, particularly land and water, 
and income. According to the authorities, Pakistan had some 8.3 million private farms in 2020: 
average farm size was 5 acres with 41% of the crop area devoted to wheat, 15% to rice, 9% to 
cotton, 11% to fodder crops , 10% to sugarcane, and 6% to maize for grain.  
 
1 FAO, Pakistan at a Glance . Viewed at: http://www.fao.org/pakistan/our -office /pakistan -at-a-
glance/en/ . WT/TPR/S/424 • Pakistan  
 
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  4.8.  Land ownership is under the jurisdiction of provincial governments, and regulations for 
acquisition vary from province to province. F oreigners, after incorporating companies in Pakistan 
and registering with th e Securities and Exchange Commission of Pakistan (SECP)  may own land. 
State land may be purchased or leased for 50 years through open auction, extendable for another 
49 years. FDI in the agriculture sector is capped at 60%, with an exception for corporate agriculture 
farming where 100% ownership is allowed.  
4.9.  Pakistan is a member of the agriculture G -20 and G -33 groups, the Cairns Group, and the 
Friends of Fish. As a net food importer, Pakistan is to eliminate export subsidies on agricultural 
products by the end of 2030, in line with the 2015 Nairobi Ministerial Declaration.  
4.10.   Pakistan continues to face high levels of  food insecurity. According to the FAO, in 2019, 20.3% 
of Pakistan's population (40 million people) is undernourished/food insecure, and "[t]he pre valence 
of malnutrition amongst children aged 6 -59 months is also very high, with an estimated 40% children 
stunted, 28% underweight, 18% wasted and 10% overweight". Further, 24% of the population is 
living below the national poverty line, and 39% is poor,  based on multidimensional poverty index 
(MPI).2 According to the authorities, the percentage of population living below the national poverty 
line declined from 50.4% in 2005/06 to 21.9% in 2018/19.  
4.11.   Large amounts of agricultural production and the continu ously increasing population place 
high demands on Pakistan's water resources. At present, the annual per capita availability of water 
is estimated at about 1,100 cubic metres, still higher than the 1,000 cubic -metre threshold for 
countries to be considered  as experiencing chronic water stress. About 90% of Pakistan's water 
resources is used for agriculture, while the remaining share is split equally between industry and 
domestic use. According to the FAO, Pakistan has the world's largest contiguous irrigati on system 
with almost 80% of the cultivated area irrigated.3 
4.12.   According to UN Comtrade data, in 2020, Pakistan imported USD  8.4 billion agricultural 
products (18.3% of total merchandise imports) and exported USD  4.4 billion (19.6% of total 
merchandise expo rts) (Table 4.1). It maintains a trade surplus in meat and bovine animals; dates, 
figs, and mangoes; and citrus fruit, but a trade deficit in tea, soya beans, and cotton not carded or 
combed. Rice is by far the most important export product in terms of its  share of total exports, while 
palm oil, cotton not carded or combed, and soya beans are the most important import products.  
Table 4.1 Agriculture exports and imports, 2015 -20 
(USD million and %)  
  2015  2016  2017  2018  2019  2020  
Exportsa 4,600.3  3,869.6  4,173.8  5,054.5  4,821.9  4,353.8  
% of total exports  20.8 18.8 19.1 21.4 20.3 19.6 
Top 10 exports at HS 4 -digit level (% of 
total)b:       
1006 Rice  41.9 44.0 41.8 39.6 47.1 48.3 
2207 Ethyl alcoholc  6.7 6.4 9.1 9.0 6.7 8.0 
0201 Meat of bovine animals; fresh or 
chilled  2.9 3.5 2.7 3.2 4.3 5.1 
0805 Citrus fruit; fresh or dried  4.0 4.4 3.3 3.5 3.3 4.7 
0804 Dates, figs, avocados, guavas, 
mangoes and mangosteens; fresh or dried  2.7 4.4 3.7 3.7 3.6 3.7 
0703 Onions, shallots, garlic and other 
alliaceous vegetables; fresh or chilled  0.9 0.4 0.7 1.0 1.4 2.9 
0901 Ginger, saffron, turmeric (curcuma), 
thyme, bay leaves, curry and other spices  1.3 1.7 1.7 1.4 1.5 1.9 
0701 Potatoes; fresh or chilled  2.7 2.0 1.9 2.4 2.4 1.6 
1704 Sugar confectionery, not containing 
cocoa  1.7 2.0 2.4 1.2 1.6 1.5 
5202 Cotton waste (including yarn waste 
and garneted stock)  1.0 1.2 1.4 1.1 0.9 1.3 
 
2 FAO, Pakistan at a Glance . Viewed at: http://www.fao.org/pakistan/our -office/pakistan -at-a-
glance/en/ . 
3 FAO, Pakistan at a Glance . Viewed at: http://www.fao.org/pakistan/our -office/pakistan -at-a-
glance/en/ . WT/TPR/S/424 • Pakistan  
 
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    2015  2016  2017  2018  2019  2020  
Importsa 6,076.1  6,677.4  7,758.8  7,302.8  6,282.0  8,378.4  
% of total imports  13.8 14.2 13.5 12.1 12.5 18.3 
Top 10 imports at HS 4 -digit level (% of 
total):        
1511 Palm oil and its fractions, not 
chemically modified  27.2 25.5 27.0 26.4 27.9 25.2 
5201 Cotton, not carded or combed  8.9 8.7 9.8 14.4 11.3 15.7 
1201 Soya beans  4.1 5.7 9.6 12.9 12.0 10.1 
1001 Wheat and meslin  0.04 0.00 0.00 0.00 0.00 7.9 
0713 Leguminous vegetables, shelled  8.1 10.5 11.0 7.6 7.4 7.8 
0902 Tea  7.5 7.3 7.1 7.8 7.9 7.0 
1205 Rape or colza seeds  6.1 7.0 6.1 5.5 5.8 3.9 
1901 Malt extract; food preparations of 
flour, groats, meal, starch or malt extract 
(..) 1.8 1.9 1.8 2.1 1.9 1.6 
0703 Onions, shallots, garlic and other 
alliaceous vegetables; fresh or chilled  1.3 1.5 1.0 0.6 1.2 1.6 
1701 Cane or beet sugar and chemically 
pure sucrose, in solid form  0.1 0.1 0.1 0.1 0.1 1.5 
a WTO definition.  
b Top 10 agricultural exports and imports by HS 4 -digit in 2020.  
c Ethyl alcohol undenatured; of an alcoholic strength by volume of 80% vol. or higher; ethyl alcohol 
and other spirits, denatured, of any strength.  
Source:  WTO Secretariat calculations, based on trade figures from UN Comtrade database.  
4.13.   Pakistan maintains self -sufficiency targets for various agriculture products including wheat, 
onion, potatoes, rice and maize, vegetables, and fruits.  
4.14.   Pakistan is among the world's top 10 producers of wheat, cotton, sugar  cane, mango, dates, 
and kinnow oranges, and is ranked 9th in rice production. The structural shift within the agriculture 
sector continued during the revi ew period, with the crop subsector gradually declining (40.2% in 
FY2013/14 to 35.8% in FY2020/21), and livestock's share of agricultural value -added increasing 
from 56% to 60%.  
4.15.   In FY2020/21, the agriculture sector grew by 2.77% against a target of 2.8%. Th e growth 
rate of "important" crops (wheat, rice, sugar  cane, maize, and cotton) was 4.65%, reflecting 
sufficient availability of agricultural inputs (water, subsidized fertilizers, certified seeds, pesticides, 
and agriculture credit).4 Other crops grew by  1.41% because of an increase in the production of 
fodder, vegetables, and fruits. Cotton ginning declined by 15.58%, due to fall in the production of 
the cotton crop. Livestock achieved an annual average growth rate of 3.28% during the review 
period (Tabl e 4.2). 
Table 4.2 Agriculture sector growth rates, 2014/15 -2020/21  
(Agriculture growth (base = FY2005/06))  
 FY2014/15  FY2015/16  FY2016/17  FY2017/18  FY2018/19  FY2019/20  FY2020/21  
Agriculture  2.13 0.15 2.18 4.00 0.56 3.31 2.77 
Crops  0.16 -5.27 1.22 4.69 -4.96 5.54 2.47 
Important crops  -1.62 -5.86 2.60 3.56 -7.69 5.24 4.65 
Other crops  2.51 0.40 -2.51 6.26 2.60 8.08 1.41 
Cotton ginning  7.24 -22.12  5.58 8.80 -12.74  -4.82 -15.58  
Livestock  3.99 3.36 2.99 3.70 3.82 2.10 3.06 
Source:  Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf . 
 
4 Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf . WT/TPR/S/424 • Pakistan  
 
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  4.1.2   Policy, institutional, and regulatory developments  
4.16.   The main legislation regulating the agriculture sector includes the Animal Quarantine (import 
and export of animals and animal products) Act 1979 and Rul es 1980, which regulate import and 
export of animals and animal products (Section 3.3.4). Recently, the Government promulgated the 
Price Control and Prevention of Profiteering and Hoarding Order 2021 under the Price Control and 
Prevention Profiteering and Hoarding Act 1977. The Order stipulates that the Controller General of 
wheat and sugar prices is the Secretary of the Ministry of National Food Security and Research 
(MNFSR).  
4.17.   The MNFSR is responsible for formulating agriculture and food security policies a t the federal 
level. Provincial governments are responsible for agriculture development in their regions. The 
MNFSR issued Agricultural Policy 2020, covering the period from 2018 to 2023. It focuses on food 
accessibility, i.e. the ability for households to  acquire adequate food, and food distribution within 
households. Research is coordinated and disseminated by the Pakistan Agricultural Research Council 
(PARC). SOEs, in particular the Trading Corporation of Pakistan (TCP), are involved in international 
trade of several essential commodities (mainly wheat and sugar) (Section  3.3.6.1). The authorities 
state that the TCP plays a role in the procurement of essential food items for the country whenever 
the issue of national food security arises, but it does not participate in the trading of commodities 
on behalf of Government.  
4.18.   Under the Rules of Business 1973, the major functions of the MNFSR include economic 
coordination and planning regarding food and agriculture, as well as import and export control, 
inspectio n, and grading on food grains and foodstuffs. The MNFSR also regulates the operation of 
the Livestock and Dairy Development Board and the Pakistan Oilseed Development Board (for federal 
areas only), as well as administrative control of the Pakistan Agricul tural Storage & Services 
Corporation Ltd (PASSCO).5 PASSCO is an autonomous body, dealing with the storage, processing, 
supply, and handling of crops including pulses, rice, wheat, and perishable commodities. According 
to the authorities, it does not regu late the prices of products but is responsible for maintaining the 
strategic reserves of wheat for food security.  
4.19.   The Government's overall policy objective for the agriculture sector is to ensure uninterrupted 
supply of basic food items at affordable price s. The primary goal is to enhance financial inclusion in 
the agriculture sector to boost productivity and exports, hence enabling a rural development -driven 
economic growth.6 Pakistan's Vision 2025 considers raising the growth rate of agriculture as a key  
driver of economic growth.7 At the same time, a number of agricultural products are prohibited from 
exportation against the backdrop of food insecurity (Section 3.2.3).  
4.20.   To achieve these targets, the Government introduced the Agriculture Transformation Pl an 
(ATP) on 1  July 2021. Under the Plan, provinces work on adjusting machinery "given" under National 
Agriculture Emergency Projects (NAEP) on wheat, rice, sugar  cane, and oilseeds to, inter alia , 
increase their usage and build an intervention and pre -qualification mechanism. According to the 
Plan, the Government (both at the federal and provincial levels) is to adopt two -stage interventions 
(Table 4.3).  
Table 4.3 Agriculture Transformation Plan  
Interventions  Target sectors  
First generation – bridging the yield gap   
Seed sector reforms  
Inputs: digital subsidy mechanism  
Mechanization  
Water efficiency  
Revamping extension services  
Access to credit  
Post-harvest storage  
Restructuring research institutes  Cotton revival  
Olive deepening  
Genetic improvement in livestock  
Fisheries  
 
5 MNFSR (2020), Year Book 2019 -20. Viewed at: www.mnfsr.gov.pk/frmDetails.aspx .  
6 Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf .  
7 Ministry of Planning, Development and Reform, Pakistan 2025: On e Nation – One Vision . Viewed at: 
https://www.pc.gov.pk/uploads/vision2025/Pakistan -Vision -2025.pdf .  WT/TPR/S/424 • Pakistan  
 
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  Interventions  Target sectors  
Second generation   
Horizontal expansion  
International cooperation  
Value chain development  
Clusters (fruits and vegetables)  
Perishable produce  Crop zoning  
Land consolidation  
Organic farming  
Adaption and self -discovery  
Sub-montane agriculture  
Source:  Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf . 
4.21.   The authorities indicate that the total estimated capital investment to introduce the designed 
interventions would be USD  1.039 billion, over a period of five years. More than half (59 %) of this 
investment would go to develop value chain and processing infrastructure, followed by investment 
on planting material to renovate fruit gardens. Strengthening of research and capacity -building 
would require about 8.8% and 8.4% of the total inves tment, respectively. When the ATP is fully 
implemented, it will generate USD  9.9 billion of gross revenue annually to various stakeholders, 
mostly in rural areas.  
4.22.   In addition to the ATP, Pakistan uses a wide range of policy tools, both at the border and 
domestically, to facilitate the development of the agricultural sector. Main policy measures include 
tariffs, regulatory duties, import/export prohibitions and restrictions, input subsidies, support prices, 
and tax reductions and exemptions. Agricultural and  food products are also subject to ad hoc  
measures under SROs (Section  3.1.3). During the review period, affected products included cotton 
yarn, wheat, and maize.8 
4.1.2.1   Border measures  
4.1.2.1.1   Tariffs  
4.23.   The agriculture sector receives more trade protection than the rest of the economy, and tariffs 
are the major policy tool used at the border (Section 3 .1.3). The authorities state that Pakistan is 
the fifth -largest country in terms of population, with more than 220 million people with livelihood 
dependency on agricult ure growth and food security. It is also a Net Food Importing Country and 
depends on imported staple foods, such as wheat and sugar, for its domestic consumption. According 
to the authorities, under the Fifth Schedule of the Customs Act, Pakistan has remov ed all tariffs on 
import of these two items along with pulses and other essential items (Section 3.1.3.6), while a 
minimum required tariff protection has been provided to small -scale subsistence -level farmers 
against the highly mechanized and subsidized fa rming in most of the developed countries.  
4.24.   As at 2021/22, the simple average applied MFN tariff rate on agricultural products 
(WTO  definition) was 13.2% (13% when AVEs  are included), higher than that on non -agricultural 
products (11.9%) but down from 14.6% in FY2014/15 (Table 3. 2). Among the 883  agricultural tariff 
lines at the HS 8 -digit level, 6.1% (55 lines) are duty -free, which is much less than the duty -free 
percen tage of non -agricultural tariff lines (32.0%).  
4.25.   A total of 38 lines (4.3% of 883 WTO agriculture lines) carry non -ad valorem  duties, all 
specific. They are betel leaves, all vegetable oils, and some animal fats and oils.  
4.26.   Tariff rates range from zero to 90% (93.6% when AVEs are included) (Table A3.1). The 
highest  ad valorem rate (90%) applies to alcoholic beverages. When AVEs are included, the highest 
rate (93.6%) applies to betel leaves (HS 1404.90.20).  
4.27.   In addition to tariffs, since June 2014 Pakistan has im posed regulatory duties (RDs) of 5% on 
imports of numerous agricultural goods.9 The authorities confirm that the RDs are still valid to date. 
During the review period, the Government imposed RDs on imports of 120 different agricultural 
items, and they ran ge from 5% to 60%, in addition to being levied at PKR 400/kg on betel leaves.  
 
8 Federal Board of Revenue (FBR), SROs. Viewed at: 
https://fbr.gov.pk/ShowSROs?Department=Sales%20Tax .  
9 SRO 568(I)/2014, 26  June 2014.  WT/TPR/S/424 • Pakistan  
 
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  The authorities also state that Pakistan imposes RDs of 2% to 90% on imports of some agricultural 
goods, as well as on staple foods, to protect the interests of small -scale subsi stence farmers.  
4.1.2.1.2   State trading, import restrictions  
4.28.   The authorities state that Pakistan does not have state trading arrangements. On the advice 
of MFNSR and with the approval of the Federal Cabinet, the Ministry of Commerce imports urea 
through the TCP, whi le other fertilizers are imported by the private sector. For sugar, a large number 
of sugar mills produce and sell sugar. The MNFSR, along with the Ministry of Industries and 
Production (MOIP) and the Ministry of Commerce (MoC), carries out sugar import.  
4.29.   At the time of the previous Review, Pakistan banned the importation of  live animals from 
countries with bovine spongiform encephalopathy (BSE) outbreaks, as well as poultry and poultry 
products on account of the H5N1 Avian influenza.10 The authorities state  that the MNFSR has revised 
its guidelines and continues to ban these imports under Import Policy Order 2020 (Clauses 5(2) and 
6(6-12)). A number of agricultural products face import restrictions on sanitary grounds 
(Table  A3.4).  
4.1.2.1.3   Export measures  
4.30.   During the  review period, Pakistan did not notify the WTO whether it has provided any export 
subsidies subject to reduction commitments. The authorities state that Pakistan is not providing any 
export subsidies, and notifications are under preparation.  
4.31.   In line with the 2015 Nairobi Ministerial Declaration11, least developed countries (LDCs) and 
net food -importing developing countries (including Pakistan)12 shall continue to benefit from the 
provisions of Article  9.4 of the Agreement on Agriculture until the end of 20 30. 
4.32.    Export prohibitions are in place for pulses of all sorts, gram and gram flour, sugar, and wood 
timber. Export of livestock has been banned since 2013. According to the authorities, this is to 
ensure food security, conserve the genetic pool of livestoc k in the country, and promote value 
addition and processing in livestock.  
4.33.   From 2020, wheat, wheat flour, and wheat products were prohibited from export, on account 
of a shortage of supply of wheat to meet domestic demand. The authorities state that in 2020  the 
Government imported 2.2 million tonnes of wheat to bridge the demand -supply gap and subsidized 
PKR 95 billion to keep the price of wheat at an affordable level for marginalized segments of the 
society. In 2018/19, the Government permitted wheat export s as there was a surplus. The 
Government provided transport rebates to enable the export process.  
4.34.   Export duties, in the form of RDs, are levied on hide and skin, and molasses. According to the 
authorities, this is to protect the interests of subsistence -level small farmers, as 60% of the rural 
population is dependent on these products, and the duties have been reduced (Section 3.2.2).  
4.1.2.2   Domestic measures  
4.35.   Pakistan provides domestic supports in various forms to its agriculture sector.  
4.1.2.2.1   WTO notification  
4.36.   The most recent notification made by Pakistan to the WTO regarding its domestic support to 
agriculture covers the 2015/16 marketing year.13 According to this notification, total support to 
agriculture reached USD  1,033.98 million in FY2015/16 (Table 4.4). Green Box accounted for 7.3% 
 
10 WTO document WT/TPR/S/311/Rev.1, 2 June 2015.  
11 WTO document WT/MIN(15)/45, WT/L/980, 21  December  2015.  
12 LDCs and net fo od-importing developing countries are listed in WTO document G/AG/5/Rev.10, 
23 March 2012, which was revised in WTO document G/AG/5/Rev.11, 24  September  2020.  
13 WTO document G/AG/N/PAK/20, 16  March  2021.  WT/TPR/S/424 • Pakistan  
 
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  of total domestic support, while trade -distorting support (aggregate measure of support (AMS) or 
Amber Box) ac counted for 92.7%.  
4.37.   In FY2015/16, Green Box support amounted to USD  75.17 million: 53.4% of which was spent 
on infrastructure services, 34.6% on research, and 11.9% on extension and advisory services. 
Product -specific support to wheat and non -product -specif ic AMS amounted to USD  958.81  million 
(USD  662.17 for wheat and USD  296.64 for non -product -specific AMS); all support was  de minimis.  
Table 4.4 Domestic agricultural support notified to the WTO, Marketing year  2015/16  
 
Value  
(USD million)  Below de minimis  level 
of 10%a 
Product -specific AMS    
Wheat  662.17  Yes 
Non-product -specific AMS  296.64  Yes 
Fertilizer subsidy  194.73   
Electricity subsidy  101.9   
Agriculture credit subsidy  0  
Total AMS  958.81   
Green Box assistance  75.17   
Research  26.02   
Pest and disease control  0  
Extension and advisory services  8.98  
Marketing and promotion services  0  
Infrastructural services  40.16   
Irrigation, drainage and reclamation  0  
Flood control  1.8  
On farm water management  38.36   
Public stockholding for food security purposes  0  
Total notified assistance  1,033.98   
a Based on 2018 value of products.  
Note:  Marketing year from 01/07/2015 to 30/06/2016.  
Source:  WTO document G/AG/N/PAK/20, 16  March 2021.  
4.1.2.2.2   Other support  
4.38.   Other support takes the form of, inter alia, tax reductions and exemptions, grants, and price 
support. Under the Constitution, agriculture is exempt from all federal taxes. Income from 
agriculture, including rent from agricultural land, is ex empt from all federal taxes, although it may 
be subject to provincial taxes. Excise duties apply to some tobacco and cigarette products. Domestic 
agricultural produce not subject to further processing is exempt from sales tax, according to the 
Sixth Schedu le of the Sales Tax Act 1990. A reduced sales tax applies to tractors and a wide range 
of agricultural equipment at 5%, compared with the standard 17% rate. Concessional customs duties 
of zero, 2%, 3%, or 5% apply to imports of a wide range of machinery fo r agriculture and allied 
sectors, cool -chain machinery, and related capital goods.  
4.39.   In the FY2019/20 Budget, the Government announced a new crop insurance scheme. It also 
announced a five -year programme to improve the agriculture sector by budgeting PKR  280 billion 
on projects such as building water conservation infrastructure, implementing livestock initiatives, 
and increasing crop yields.14 In addition, the Government provides a subsidy to domestic feedstock 
used in the production of fertilizer, 25% of which is provided to tail ends15 of canal irrigation areas.  
4.40.   The MNFSR reviews the prices of agriculture inputs (water, fertilizer, etc.) and products (fruit, 
vegetables, and grains) , and price support is provided by the Government for wheat (Table 4.5). 
Based on inputs from the Agriculture Policy Institute, the MNFSR submits proposals for the support 
price to the Economic Coordination Committee  (ECC) of the Federal Cabinet for approval. After the 
 
14 EIU (2020), Country Commerce – Pakistan , October.   
15 Tail end is the point where a canal ends. It is cleaned to ensure  the canal is not blocked.  WT/TPR/S/424 • Pakistan  
 
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  approval, PASSCO and the food departments of provincial governments are allocated quotas to 
procure wheat on support price. Sugar  cane prices are announced by provincial governments 
(Section 4.1.3.1.3).  The price of rice is determined by the market. For cotton and sugar, indicative 
benchmark prices are announced by the Government. For example, the Federal Government recently 
announced the indicative price for seed cotton for 2021/22. The TCP is required to purchase seed 
cotton from farmers if the price falls below this indicative price. A cotton review committee was set 
up in August 2021 to monitor market dynamics and intervene if required. The authorities state that 
this committee is temporary in nature.  In 2021, the Government also announced the price of sugar, 
pursuant to the Price Control and Prevention of Profiteering and Hoarding Order 2021 under the 
Price Control and Prevention of Profiteering and Hoarding Act 1977.  
Table 4.5 Procurement/support prices of wheat, FY2015/16 –FY2020/21  
(PKR per 40  kg) 
Commodity  FY2015/16  FY2016/17  FY2017/18  FY2018/19  FY2019/20  FY2020/21  
Wheat  1,300  1,300  1,300  1,300  1,400  1,800a 
a The Government of Sindh announced the support price of wheat at PKR 2,000/40  kg. 
Source:  Information provided by the authorities.  
4.41.   In the wake of COVID -19 pandemic, the Government announced a fiscal package of over 
PKR 1,200 billion, of which PKR  50 billion was earmarked for the agriculture sector, covering16: 
• subsidies to fertilizers: PKR  1,000 per bag of phosphatic fertilizers for the Rabi crops of 
2020 and subsequently for Kharif 2021 (for definitions of Rabi and Kharif, see 
Section  4.1.3.1);  
• markup subsidy: PKR  6.861 billion f or 10% markup subsidy on agriculture loans 
disbursed by Zarai Tarqiati Bank Ltd (ZTBL);  
• subsidy on whitefly pesticides and cotton seeds: PKR  6 billion on the purchase of 
whitefly -related pesticides, and PKR  2 billion on cotton seeds during its sowing seaso n 
in 2021; and  
• sales tax subsidy on locally manufactured tractors: PKR 1.5  billion to cover 5% of the 
sales tax on locally manufactured tractors.  
4.1.3   Key subsectors  
4.1.3.1   Crops  
4.42.   Pakistan has two cropping seasons. Kharif, the first sowing season, starts from April to June 
and is harvested from October to December. Kharif crops consist mainly of rice, sugar  cane, cotton, 
maize, moong, mash, bajra, and jowar. Rabi, the second season, starts from October to December 
and is harvested from April to May. Rabi crops comprise mainly wheat, gram, lentil (masoor), 
tobacco, rapeseed, barley, and mustard.17 Some crops are grouped into "important" ones, including 
wheat, maize, rice, sugar  cane, cotton, tobacco, and oilseeds (Table 4.6). In FY2020/21, important 
crops contrib uted to around 4.3% of GDP, while other crops contributed 2.2%.  
4.43.   Crop production has been facing challenges including insufficient irrigation, limited adoption 
of modern farming techniques, various plant pests, inadequate storage facilities, low -quality see ds, 
farm fragmentation, and natural disasters. During the review period, agriculture was severely 
affected by locust infestation, the COVID -19 pandemic, climate change, and low -tech infrastructure 
(low R&D) effects.  
 
16 MNFSR (2020), Year Book 2019 -20. Viewed at: http://www.mnfsr.gov.pk/frmDetails.aspx .  
17 Finance Divis ion (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf . WT/TPR/S/424 • Pakistan  
 
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  Table 4.6 Area and production of important crops, FY2015/16 –FY2020/21  
(Area: '000 hectares; production: '000 tonnes)  
Crops  FY2015/16  FY2016/17  FY2017/18  FY2018/19  FY2019/20  FY2020/21  Area  
Production  
Area  
Production  
Area  
Production  
Area  
Production  
Area  
Production  
Area  
Production  
Wheat  9,224  25,633  8,972  26,674  8,797  25,076  8,678  24,349  8,805  25,248  9,178  27,293  
Maize  1,151  5,271  1,348  6,134  1,251  5,902  1,374  6,826  1,404  7,883  1,418  8,465  
Rice 2,740  6,801  2,724  6,849  2,901  7,450  2,810  7,202  3,034  7,414  3,335  8,419  
Sugar cane  1,132  65,482  1,218  75,482  1,342  83,333  1,102  67,174  1,040  66,380  1,165  81,009  
Tobacco  52,704  115,57
4 47,247  100,01
5 46,331  106,72
7 44,877  104,35
5 50,789  132,87
2 .. .. 
Cottona 2,902  9,917  2,489  10,671  2,700  11,946  2,373  9,861  2,517  9,148  2,079  7,064  
Oil seedsb 468 3,595  461 3,830  510 4,352  550 3,760  747 3,823  .. .. 
.. Not available.  
a Cotton production is in '000 bales (375  lbs per bale).  
b The oil seeds category includes sesamum, groundnut, soya bean, safflower, sunflower, R&M seeds 
(including canola), and cottonseeds.  
Source:  Pakistan Bureau of Statistics.  
4.1.3.1.1   Wheat  
4.44.   Wheat, the most important Rabi crop, grew by 8.1% and reached a record -high production 
level of 27.3 million tonnes in 2020/21 (Cha rt 4.1). Its cultivation area increased from 8.8 million 
hectares to 9.2 million hectares, prompted by policies promoting wheat production. In FY2020/21, 
the Government provided a comprehensive Rabi Package comprising subsidies on fertilizers, 
fungicides, and weedicides, together with an increase in the Minimum Support Price (MSP) of wheat 
from PKR  1,400 to PKR  1,800 per 40 kg (Table 4.5).  
Chart 4.1 Wheat, 2015/16 -2020/21  
 
Source:  Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf . 
4.45.   According to UN Comtrade data, Pakistan was a net wheat exporter fo r most years during the 
review period, although wheat trade value and volumes were rather volatile (Table  4.7). The 
authorities state that the volatility is due to the rapid growth of population; natural disasters such 
as locust infestations, heavy rainfal ls, stormy weather, and floods; low -tech infrastructure and R&D; 
and changes in the price of wheat in the international market. Export of wheat was prohibited from 
2020, reflecting domestic shortages due to natural disasters (Section 4.1.2.1.3). Import of wheat is 
subject to pre -shipment inspection requirement (Table  A3.4). All items under HS 1001 (i.e.  wheat 
and meslin) face the same MFN applied tariff rate of 11% in 2021/22.  According to the authorities, 
the tariff increase was part of an IMF reform progr amme conducted in 2014/15.18 
 
18 The authorities state that under the 2014 -15 IMF programme, the tariff rate at 10% was removed 
and replaced by the tariff rate at 11%, with a view to simplifying Pakistan's tariff structure.  
8,4008,5008,6008,7008,8008,9009,0009,1009,2009,300
22,50023,00023,50024,00024,50025,00025,50026,00026,50027,00027,50028,000
2015/16 2016/17 2017/18 2018/19 2019/20 2020/21Area ('000 hectare) [right-hand scale]
Production ('000 tonnes) [left-hand
scale]Chart 4.[PAK] Wheat, 2015 -2021
Source:   Finance Division, Government of Pakistan (2021), Pakistan Economic Survey 2020 -21. 
Viewed at: https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdfWT/TPR/S/424 • Pakistan  
 
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  Table 4.7 Wheat trade  
HS 1001 wheat and 
meslin   2015  2016  2017  2018  2019  2020  
Export  USD ('000)  3,194.4  1,677.2  1,075.4  322,416.7  66,543.1  n.a.  
 
Tonnes  9,511.0  5,091.0  4,110.0  1,650,824.0  273,696.0  n.a.  
Import  USD ('000)  2,408.6  4.7  0.3  .. ..  660,077.7  
 
Tonnes  9,468.0  41.0  1.0  .. .. 2,490,628.0  
.. Not available.  
n.a. Not applicable.  
Source:  UN Comtrade database.  
4.46.   The Government, through PASSCO and provincial governments, procures around one third of 
domestic wheat output. According to the MNFSR, provincial governments procure wheat "preferably" 
from small farmers. PASSCO procures wheat from open markets (irrespecti ve of the size of farms 
and farmers) with a view to maintaining a strategic reserve for food security. Wheat stocks are held 
by PASSCO, as well as by food departments of provincial governments.  
4.47.   Interprovincial movement of wheat and flour may be restricted in order to stabilize prices 
across the country. The authorities state that restrictions may apply in extreme rare cases for 
administrative purposes.  
4.1.3.1.2   Rice 
4.48.   Rice is Pakistan's second main staple food crop after wheat, and the second major exportable 
commodit y after cotton. During the review period, production and cultivation areas increased. In 
particular, production increased by 13.6% in FY2020/21 from the FY2019/20 level, due to rising 
prices and higher demand for rice in export markets (Chart 4.2).  
Chart 4.2 Rice, 2015/16 -2020/21  
 
Source:  Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf . 
4.49.   Exports of rice (HS 1006) amounted to USD  2.1 billion in 2020 (Table 4.8), same as in 2013, 
and accounting for 48.3% of total agricultural exports.19 
Table 4.8 Rice trade, 2015 -20 
HS 1006 rice  2015  2016  2017  2018  2019  2020  
Export  USD ('000)  1,927,200.4  1,703,048.7  1,743,502.6  2,001,812.5  2,270,300.1  2,101,267.8  
 
Tonnes  4,055,234.0  3,958,261.0  3,656,823.0  3,932,390.0  4,589,123.3  3,985,839.1  
Import  USD ('000)  21,221.7  33,584.3  21,646.3  30,185.1  34,188.4  33,303.7  
 
Tonnes  56,783.0  17,348.0   9,403.0  12,076.0  10,531.0  9,432.0  
Source:  UN Comtrade  database.  
 
19 Figures do not include rice products such as rice flour.  
05001,0001,5002,0002,5003,0003,5004,000
01,0002,0003,0004,0005,0006,0007,0008,0009,000
2015/16 2016/17 2017/18 2018/19 2019/20 2020/21Area ('000 hectare) [right-hand scale]
Production ('000 tonnes) [left-hand
scale]Chart 4.[PAK] Rice, 2015 -2021
Source:   Finance Division, Government of Pakistan (2021), Pakistan Economic Survey 2020 -21. 
Viewed at: https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdfWT/TPR/S/424 • Pakistan  
 
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  4.50.   As at 2021/22, the applied MFN tariff on rice is 11% (3% for seed rice), up from 10% (1% 
for seed rice) in 2013. According to the authorities, the tariff increase was part of the 2014/15 IMF 
reform programme (Section 4.1.3.1.1).  
4.51.   The authorities state that the private sector, including the Rice Exporters Association of 
Pakistan (REAP), is responsible for rice export. According to the authorities, registration with the 
REAP is not necessary for rice exporters.  
4.1.3.1.3   Sugar cane  
4.52.   Sugar cane is a high -value cash crop and is of great significant for sugar -related industries. 
In FY2020/21, sugar  cane was cultivated on 1,165,000 hectares, an increase of 12% from 
FY2019/20 (Chart 4.3). Production increased by 22% during the same period. The significant 
increases in cultivation area and yield were mainly due to favourable weather conditions, better 
management, timely availability of quality inputs, and higher economic returns.20 
Chart 4.3 Sugar cane, 2015/16 -2020/21  
 
Source:  Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf . 
4.53.   As at 2021/22, the applied MFN tariff on sugarcane was 3%, while that on raw sugar not 
containing added flavouring or colouring matters was 20% (for beet sugar and cane sugar), 11% 
(for sugar containing added flavouring or colouring matter), and 20% for other sugar.  
4.54.   Provincial governments set the annual indicative  price for sugarcane and for 2020/21 the price 
was set at PKR 200/40  kg for Punjab and PKR 202/40  kg for Sindh. The federal and provincial 
governments occasionally procure sugar to provide subsidized sugar for marginalized segments of 
the society.  
4.55.   To guarantee minimum  levels of domestic consumption, sugar exports have been subject, 
since 2012, to a quota set annually by the ECC. For every kilogram of sugar exported under the 
quota, the ECC provides a subsidy of PKR 10 to support, inter alia , freight  transport. The annual 
quota reached 1,100,000 MT in 2018. Based on UN Comtrade data, the export values of sugar 
reached their peak in 2018 (USD  386.4 million), but declined drastically after that (Table 4.9). In 
2020, sugar was banned from exportation due  to a shortage of sugar domestically caused by a lack 
of water, climatic change, and rapid growth of the population.  
4.56.   According to UN Comtrade data, the export value of sugarcane in 2020 was about half of its 
value in 2015, and Pakistan started to import su garcane in 2020. However, the authorities state that 
sugarcane has never been imported nor exported.  
 
20 Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf .  
02004006008001,0001,2001,4001,600
010,00020,00030,00040,00050,00060,00070,00080,00090,000
2015/16 2016/17 2017/18 2018/19 2019/20 2020/21Area ('000 hectare) [right-hand scale]
Production ('000 tonnes) [left-hand
scale]Chart 4.[PAK] Sugarcane, 2015 -2021
Source:   Finance Division, Government of Pakistan (2021), Pakistan Economic Survey 2020 -21. 
Viewed at: https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdfWT/TPR/S/424 • Pakistan  
 
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  Table 4.9 Sugarcane and sugar trade, 2015 -20 
(USD '000)   
2015  2016  2017  2018  2019  2020  
HS 121293: Sugar cane; fit for human consumption, fresh, chilled, frozen or dried, whether or not ground  
Exports  211.2  221.8  203.8  142.4  254.5  115.3  
Imports  0 0 0 0 0.0  37.3  
HS 1701 Cane or beet sugar and chemically pure sucrose, in solid form  
Exports  234,355.7  126,783.6  344,566.1  386,396.9  220,534.7  1,562.3  
Imports  6,184.7  4,847.6  5,333.8  4,029.8  3,726.0  129,526.0  
Source:  UN Comtrade data.  
4.1.3.1.4   Cotton  
4.57.   In 2019/20, Pakistan was ranked the fifth -largest cotton producer in the world by the 
International Cotton Advisory Committee (ICAC).21 Cotton is not only an important crop in 
agriculture, but also an essential input for the domestic textiles industry.  
4.58.   Since FY2017/18, the cultivated area for cotton has been declining in general, which led to 
reduced production (Chart 4.4). According to the Pakistan Economic Survey 2020 -21, the shrinking 
acreage of cotton reflects the non -profitability of the crop as compared to maize, paddy, and 
sugar  cane. Other factors include pests suc h as white flies and pink bollworms; climate change, heat 
stresses, and extreme rainfalls; poor agricultural practices and unnecessary use of pesticides; and 
high costs of inputs including fertilizers, pesticides, and seeds.22 
Chart 4.4 Cotton, 2015/16 -2020/21  
 
Source:  Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/ PES_2020_21.pdf . 
4.59.   Exports of raw cotton fell dramatically from USD  217 million in 2013 to USD  2.2 million in 
2020 (Table 4.10), whereas exports of cotton yarn (which does not fall under WTO agriculture) 
dropped from USD  2.2 billion to USD  0.8 billion during  the same period. The authorities state that 
the reason is the continuous decline in the domestic production of cotton. Pakistan imports 
high-quality cotton to blend with domestic cotton to produce quality fabrics; imports amounted to 
USD 1.3 billion of ra w cotton and USD  64.9 million of cotton yarn in 2020 (USD  757 million of raw 
cotton and USD  151 million of cotton yarn in 2013). The import tariff on cotton is zero. With an 
intention of encouraging domestic processing, the tariff on cotton yarn is 11%. Ac cording to the 
authorities, tariff on cotton yarn was revised to 5%.  
 
21 ICAC data portal. Viewed at: https://www.icac.org/DataPortal/DataPortal/?menuId=23 .  
22 Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploa ds/cpec/PES_2020_21.pdf . 
05001,0001,5002,0002,5003,0003,500
02,0004,0006,0008,00010,00012,00014,000
2015/16 2016/17 2017/18 2018/19 2019/20 2020/21Area ('000 hectare) [right-hand scale]
Production ('000 bales) [left-hand scale]Chart 4.[PAK] Cotton, 2015 -2021
Source:   Finance Division, Government of Pakistan (2021), Pakistan Economic Survey 2020 -21. 
Viewed at: https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdfWT/TPR/S/424 • Pakistan  
 
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  Table 4.10 Cotton trade, 2013 -20 
(USD million)  
HS 5201 Cotton; not carded 
or combed  Exports  Imports  
2013 217.2  757 
2014 180.9  521.6  
2015 105.6  543.7  
2016 40.9 580.5  
2017 60.9 761.5  
2018 19.4 1,049.0  
2019 22.2 708.5  
2020 2.2 1,315.5  
Source:  UN Comtrade data.  
4.60.   Export contracts on cotton must be registered with the Trade Development Authority of 
Pakistan (TDAP) under the MoC , with exports being subject to mandatory quality inspection and 
certification.23 
4.61.   The Government is trying to boost the production of cotton. The ATP aims to amend relevant 
laws to fast -track rele ase of new cotton varieties with novel technologies. Track and traceability of 
quality certified seed to farmers has also been initiated, and organic farming started in some parts 
of Pakistan. The Pakistan Central Cotton Committee (PCCC), a semi -autonomous  body in the MNFSR, 
has as an objective to improve the sector's productivity.  
4.1.3.2   Livestock  
4.62.   The livestock sector contributes to about 60% of the value -added in the agriculture sector, 
amounting to around 11.5% of GDP in FY2021. More than 8 million rural farmer s are engaged in 
livestock production, from which they derive more than 35% -40% of their income. In FY2021, gross 
value -added in this subsector went up by 3.06% from FY2020 (Table 4.2).  
4.63.   In 2020, the main export livestock product was meat of bovine animals,  fresh or chilled 
(HS 0201), and main import product was milk and cream (HS  0402) (Table 4.11).  
Table 4.11 Major livestock trade, 2015 -20 
(USD million)  
  2015  2016  2017  2018  2019  2020  
Export        
HS 0201 - Meat of bovine animals, 
fresh or chilled  131.8  136.3  113.6  162.5  209.6  224.2  
HS 0204 - Meat of sheep or goats, 
fresh, chilled or frozen  58.3 44.7 18.1 21.1 38.3 45.0 
HS 0202 - Meat of bovine animals, 
frozen  48.4 31.6 50.3 20.2 19.1 20.5 
HS 0206 - Edible offal of bovine 
animals, swine, sheep, goats, horses, 
asses, mules or hinnies, fresh, chilled 
or frozen  22.3 23.9 23.8 15.8 16.4 11.9 
HS 0401 - Milk and cream, not 
concentrated nor containing added 
sugar or other sweetening matter  34.7 30.8 29.7 21.1 12.6 9.3 
Imports        
HS 0402 - Milk and cream, 
concentrated or containing added sugar 
or other sweetening matter  175.0  154.1  134.3  112.7  87.1 54.3 
HS 0404 - Whey  25.7 27.9 25.1 21.4 24.3 23.9 
HS 0105 - Live poultry  10.4 10.9 13.6 10.6 12.3 7.4 
HS 0406 - Cheese and curd  6.8 9.3 13.3 13.1 9.2 6.2 
HS 0102 - Live bovine animals  9.8 6.8 10.7 11.1 8.0 3.1 
Source:  UN Comtrade data.  
 
23 WTO document WT/TPR/S/311/Rev.1, 2  June 2015.  WT/TPR/S/424 • Pakistan  
 
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  4.64.   The average MFN tariff on imports of live animals and products thereof (HS Section I) is 12.5% 
(up from 11.2% in 2013), with tariffs ranging from 3% to 20% (from 1% to 25% in 2013).  
4.65.   Pakistan is the 11th-largest poultry producer in the world.24 The poultry sector provides 
employment to more than 1.5 million people. It grew at approximately 7.5% per annum  over the 
last decade. The Government has been continuing its Poultry Development Strategy since 1979, 
which revolves around disease control, high -tech poultry production, processing, value addition, 
improving poultry husbandry practices, and diversificati on of products. The Government encourages 
both rural and commercial poultry production.  
4.66.   During the review period, the Government renewed its focus on the livestock sector for 
economic growth, food security, and poverty alleviation. The overall livestock de velopment strategy 
aims to foster "private -sector -led development with public sector providing [an] enabling 
environment through policy interventions".25 The target is to promote per -unit animal productivity 
by improving health coverage, management practic es, animal breeding practices, artificial 
insemination services, use of balanced rations for animal feeding, and controlling livestock diseases.  
4.67.   According to the Pakistan Economic Survey 2020 -21, the Government is considering 
developing meat export processing zones (EPZs) with a view to keeping animal diseases under 
control. Within these zones, the Government intends to set up modern slaughterhouses and 
introduce various schemes to give farmers easier access to finance. The focus is on breed 
improvem ent, establishment of nucleus herds, and identification of breeds that are well adapted to 
various agriculture climatic zones of Pakistan. One meat EPZ was established in 2011 in Bhambhore 
Sindh. It has been transformed into "Karachi Dairy Village". Anothe r one is being established in 
Bahawalpur Division to export standard -quality meat to the global market, particularly China.  
4.68.   The MNFSR has been implementing the following measures: (i)  importing high -yielding dairy 
cattle breeds of Holstein -Friesian and Jer sey to enhance milk production; (ii)  providing semen and 
agriculture embryos of high -yielding animals for genetic improvement of indigenous low -producing 
animals; (iii)  importing high -quality feed stuff including poultry feed and/or micro -ingredients to 
improve the nutritional quality of animals; and (iv)  importing dairy, meat, and poultry processing 
machinery and equipment at concessional tariff rates to encourage and promote the establishment 
of value addition in the country.  
4.69.   The Livestock and Dairy Devel opment Board (LDDB), a not -for-profit organization under the 
MNFSR, aims to promote the development of the livestock, poultry, dairy, and meat sectors, 
including through financial assistance. The authorities state that the LDDB does not have a 
mechanism to  directly provide financial assistance to farmers. However, it may provide small 
amounts of subsidies to promote certain particular segments of the economy.  
4.70.   In July 2013, the Government decided to ban exports of livestock from 1  October  2013 with 
a view to  encouraging exports of processed meat products and providing other by -products to 
secondary industries.26 The authorities state that the ban is still valid, and the relevant notification 
is being prepared.  
4.2  Fisheries  
4.2.1   Main features and recent development  
4.71.   With a coastline of some 1,080  km, Pakistan is rich in marine fishery resources. The fisheries 
subsector contributed around 0.39% to GDP in FY2020/21, and grew by 0.73% the same year 
(Table  4.12).27 About two  thirds of fish production comes from marine fisheries, while the rest comes 
from inland fisheries (from rivers, lakes, dams, etc.).  
 
24 Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf . 
25 Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf . 
26 SRO 969(I)/2013.  
27 Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21 .pdf. WT/TPR/S/424 • Pakistan  
 
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  Table 4.12 Fisheries growth rates (base = FY2005/06), 2014/15 -2020 /21 
 FY2014/15  FY2015/16  FY2016/17  FY2017/18  FY2018/19  FY2019/20  FY2020/21  
Fisheries  5.75 3.25 1.23 1.62 0.80 0.60 0.73 
Source:  Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf . 
4.72.   Pakistan is a net fish exporter. Exports of fish and crustaceans (HS Chapter 3) amounted to 
USD 400.1 million in 2020, whereas imports were at USD  7.4 million.  
4.2.2   Fisheries policies  
4.73.   Fishing within territorial waters (up to 12 nautical miles) is under provincial responsibility, 
while deep -sea fishing is regulated by the Federal Government. The Marine Fisheries Department 
under the Min istry of Maritime Affairs has the objective of promoting Pakistan's fisheries sector. To 
achieve this objective and to promote fisheries exports, a number of initiatives are being taken by 
federal and provincial fisheries departments. They include strength ening extension services, 
introducing new fishing methodologies, developing value -added products, enhancing per capita 
consumption of fish, and upgrading socio -economic conditions of the fishing community. Recently, 
the Exclusive Fishery Zone (Regulation o f Fishing) Rules 1990 was amended to cover all aspects of 
sustainable fishing.  
4.74.   No foreign individual and foreign entity is allowed to fish in Exclusive Economic Zone (EEZ) of 
Pakistan.  
4.75.   Pakistan supports the fulfilment of the mandate of Sustainable Development Goal (SDG) 14.6 
and seeks a balanced agreement on the principle of common but differentiated responsibility with 
appropriate and unconditional policy space for developing countries and LDCs. Pakistan therefore 
supports prohibition of "harmful" subsidies for overcapacity and overfishing on the principle of 
polluters -pay and asks for the prohibition of subsidies for large -scale, deep -sea industrial fishing, 
which it considers to be lin ked to the depletion of marine fish stocks and truly harmful. At the same 
time, Pakistan seeks to exempt artisanal, small -scale, and coastal fishing from these disciplines, as 
they are not considered harmful. Pakistan asks for unconditional (not linked to the fulfilment of other 
disciplines), appropriate, and effective special and differential treatment for developing countries.  
4.76.   The authorities state that the prime interest and a distinctive focus of the Government is to 
fight against illegal, unreported, a nd unregulated (IUU) fishing and to prevent overfishing of stocks.  
4.2.2.1   Border policies  
4.77.   Pakistan's MFN tariffs on fish and fishery products (WTO definition) range from 3% to 20%, 
with an average of 13.9% in 2021/22. These rates are higher than their correspondi ng rates in 
2014/15 (ranging from 1% to 20%, with an average of 10.7%). All 265 fishery tariff lines are 
ad valorem . The highest ad valorem  rate (20%) applies to HS  0303 - fish, frozen; HS  0304 - fish 
fillets and other fish meat, fresh, chilled or frozen; HS 1604 - prepared or preserved fish; and 
HS 1605 - prepared or preserved crustaceans, molluscs and other aquatic invertebrates.  
4.78.   Pursuant to the Customs Act 1969 and Finance Act 2016, import tariff rates on live baby fish 
(HS 03.01), and on fish and shrimp  feed, have been reduced to 0%. According to the authorities,  
this is to facilitate the development of local aquaculture and commercial fish farming. Import duties 
on fish feed pellet machines and water aerators were reduced from 5% to 2%.  
4.2.2.2   Domestic support  
4.79.    In 2020, the Government introduced long -liner fishing techniques as a pilot to demonstrate 
the process . The Government also initiated the Prime Minister's Kamyab Jawan Subsidized Loan 
Scheme, which caters to the demand of the fishing population to upgrad e their equipment.  WT/TPR/S/424 • Pakistan  
 
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  4.3  Mining and Energy  
4.3.1   Mining and quarrying  
4.80.   Under the Pakistan Standard Industrial Classification (PSIC) 2007, mining and quarrying 
include the extraction of minerals occurring naturally as solids (coal and ores), liquids (petroleum), 
or gase s (natural gas). Extraction can be achieved by underground or surface mining or well 
operation. Pakistan has deposits of 92 known minerals, of which 52 are commercially exploited, 
including coal, copper, gold, chromite, and mineral salt.  
4.81.   In FY2020/21, mini ng and quarrying contributed 2.2% of GDP (down from 2.7% in 
FY2014/15). The average annual growth rate during the period from FY2014/15 to FY2020/21 was 
-0.2%. After reaching a peak growth rate at 7.8% in FY2017/18, the sector contracted in FY2019/20 
(-8.3%) and FY2020/21 ( -6.5%). Production of major minerals plunged, in particular that of 
dolomite, baryte, marble, and quartz. Some showed positive growth: chromite, iron ore, magnesite, 
and rock salt (Table 4.13).  
Table 4.13 Extractions of principal minerals, 2017/18 -March 2021  
 Unit of quantity  FY2017/18  FY2018/19  FY2019/20  July 2019 -
March 2020  July 2020 -
March 2021  
Coal MT 4,477,555  5,406,878  8,428,237  6,081,053  5,717,931  
Natural gas  MMCFT  (million 
cubic feet)  1,458,935  1,436,546  1,316,636  1,009,892  962,397  
Crude oil  US Barrel ('000)  32,557  32,496  28,086  22,260  20,768  
Chromite  MT 97,420  138,244  121,435  66,883  85,798  
Magnesite  MT 23,596  42,996  16,165  14,467  15,360  
Dolomite  MT 488,825  472,474  302,045  254,986  121,674  
Gypsum  MT 2,475,893  2,517,825  2,149,873  1,575,830  1,208,441  
Limestone  MT 70,818,725  75,596,328  65,809,924  51,061,090  46,485,992  
Rock salt  MT 3,653,746  3,799,106  3,368,978  2,546,454  2,685,023  
Sulphur  MT 22,040  20,715  19,948  15,086  14,920  
Baryte  MT 88,847  116,480  55,341  37,892  17,807  
Iron ore  MT 677,206  627,464  573,695  430,677  543,641  
Soapstone  MT 141,504  156,935  150,009  123,469  103,785  
Marble  MT 8,813,025  7,736,443  5,796,879  4,777,066  2,146,315  
Bauxite  MT 145,189  92,936  101,047  75,408  75,012  
Quartz  MT 125,014  112,308  4,592  4,292  2,232  
Ocher  MT 75,939  81,502  132,144  113,343  86,628  
Note:  MT – metric tonne.  
Source:  Pakistan Bureau of Statistics; and Finance Division (2021), Pakistan Economic Survey 2020 -21. 
Viewed at: https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf  (Table 3.16).  
4.82.   During the period 2 013-21, export values of ores and other minerals (SITC Rev.3, Codes  27 
and 28) contracted significantly, while import values more than doubled. The export value fell from 
USD 468 million in 2013 to USD  286.7 million in 2020, while import value went up from  
USD 846 million to USD  1,930.8 million during the same period. The authorities indicate that, in 
general, the increase in imports is due to decline in local oil and gas production, while the contraction 
in exports is due to enhanced domestic consumption.  
4.83.   Imports come mainly from the United Kingdom (18%), the United  States (17.5%), and the 
United Arab Emirates (13.6%). Main import items are ferrous waste and scrap and remelting scrap 
ingots of iron and steel; non -ferrous base metal waste and scrap, not else where specified; ores and 
concentrates of base metals (e.g. zinc ores and concentrates); and building or monumental stones. 
Pakistan exports its minerals and ores mainly to China (38.4%), the United  States (10.2%), the 
United Arab Emirates (9%), and the Re public of Korea (4.5%). The main export items are, inter alia, 
pure sodium chloride and common salt.  WT/TPR/S/424 • Pakistan  
 
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  4.84.   Pursuant to Article  172(3) of the Constitution, mineral oil and natural gas within a province 
or the territorial waters adjacent thereto shall vest jointly  and equally in that province and the 
Federal Government. Provincial governments are responsible for the regulation of mining operations, 
including exploration, mineral development, and safety rules. Federal responsibilities include 
geological surveys and mapping, national and international coordination, and formulation of national 
policies.  
4.85.   A National Mineral Policy was adopted in 2013, seeking to increase the economic contribution 
of the mining sector, attract foreign investment, ensure effective coordina tion between federal and 
provincial institutions, encourage small -scale mining, and ensure that mineral exploitation and 
production are environmentally sustainable. The authorities state that the rationale to encourage 
small -scale mining is to address  such miners' l ack of expertise and financial constraints. Pakistani 
nationals are given preference in small -scale mining projects: small -scale mining valued at less than 
PKR 300 million (approximately  USD 1.8 million) is restricted to Pakistani investors.28 
4.86.   Royalties are imposed by provincial governments. Profit and gain from exploration and 
extraction of mineral deposits are computed separately from other business and are taxed under the 
head "Income from business". Sector -specific incentives include carryin g forward of business losses 
for 10 years, 100% depreciation allowed to machinery and plants, and depletion allowance equal to 
20% of taxable income. The resulting profits are taxed according to the status of the legal person 
as an individual, an associati on of persons, or a company. For companies, the applicable tax rate for 
2021 is 21%, which is to be further reduced to 20% for subsequent years.  
4.87.   Large -scale mining companies pay an additional profits tax (APT), which is based on a 
three -tier mechanism and is payable only when the project achieves the threshold level of 
profitability: APT will be 10% if the after -tax real rate of return exceeds 15%, the second tier with 
a 15% tax becomes payable once the profitability levels exceed 20%, and the third tier wi th a tax 
of 18% is payable when the rate of return is higher than 25%.  
4.88.   Import tariffs on mineral products (HS Section 05) range from 0% to 20%, with an average 
of 5.6% (1% to 11%, with an average of 7.8% in 2014/15). The tariff on most mineral products is 
at 3%.  
4.3.2   Energy  
4.89.   In Pakistan, most of the primary energy supply comes from gas and oil. In FY2018/19, total 
primary energy supply was 83.8 MMTOE (million metric tonnes of oil equivalent), when natural gas 
represented the main source of energy (35%), followed by oil (25.8%), coal (15.4%), imported 
liquefied natural gas (LNG) (10.6%), and hydropower (7.8%).29 Nuclear power contributed 2.8%. 
More than 40 million people remain without access to electricity, and half the population lack access 
to clean cooking faci lities.30 
4.90.   Pakistan relies on energy imports due to lack of investment in indigenous resources of hydro, 
natural gas, and lignite. The Government decided to stop building new coal -fired power plants to 
protect the environment. SOEs continue play an importan t role in the energy sector. The 
Government plans to privatize some of them (Section 3.3. 6.2). The Government recently adopted a 
long-term plan to increase power generation capacity, i.e. the Integrated Generation Capacity 
Expansion Plan (IGCEP). The Plan aims to increase the share of renewable energy in power 
generation (i.e. up to 30% electricity from variable renewable energy sources). Moreover, several 
large hydropower plants are under construction.  
4.3.2.1   Hydrocarbons  
4.91.   In August 2017, the Ministry of Petroleum  and Natural Resources was merged with the Power 
Division of the Ministry of Water and Power to become the Ministry of Energy. Currently, it has 
 
28 USTR (2021), 2021 National Trade Estimate Report on Foreign Trade Barriers.  
29 National Electric Power Regulatory Authority (NEPRA) (2020), State of Industry Report 2020 . 
Viewed  at: 
https://nepra.org.pk/publications/State%20of%20Industry%20Reports/State%20of%20Industry%20Report%
202020.pdf . 
30 IEA, Pakistan . Viewed at: https:/ /www.iea.org/countries/pakistan .  WT/TPR/S/424 • Pakistan  
 
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  two divisions: the Petroleum Division and the Power Division. The Director ate General Petroleum 
regulates the u pstream oil and gas sector, while the Oil and Gas Regulatory Authority (OGRA) 
regulates the downstream oil and gas sector. OGRA sets standards and issues licences for storage 
and distribution, and sets household and residential prices for oil and gas.  
4.92.   The main legislation regulating the oil and gas sector includes the Mines Act 1923, the 
Regulation of Mines and Oilfields and Mineral Development (Government Control) Act 1948, including 
the Amendment of 1976, and the Territorial Waters and Maritime Zones Act 1976.31 Other legislation 
includes the six sets of Petroleum Rules (1949, 1986, 2001, 2003, 2009, 2013), eight sets of 
Petroleum Policies (1991, 1993, 1994, 1997, 2001, 2007, 2009, 2012), and incentive -based policies 
such as the Tight Gas (Exploration & Pr oduction) Policy 2011, the Low BTU (British Thermal Unit) 
Gas Pricing Policy 2012, the Marginal/Stranded Field Guidelines 2013, and the Flare Gas Utilization 
Guidelines 2016.  
4.93.   The Government issues policies and guidelines to facilitate the development of th e oil and gas 
sector. In particular, the Petroleum (Exploration & Production) Policy 2012 was issued to, inter alia, 
encourage and attract foreign investment. Under the Policy, the period of exploration licence was 
reduced from nine to seven years with a v iew to accelerating exploration. According to 
SRO 47(1)/2020, issued on 28  January  2020, a new frontier zone is to be created to encourage 
exploration in limited/unexplored areas. The gas price for this zone will be equal to that in the 
offshore shallow zo ne. 
4.3.2.1.1   Petroleum  
4.94.   As at 30  June 2019, Pakistan's oil reserves were estimated at 568 million barrels, an increase 
of 66% from the 2012 level (342 million barrels). The increase reflects the Government's policy of 
aggressive exploration and production, and the u se of 3D seismic surveying and advanced 
exploration techniques and tools.32 
4.95.   Pakistan imports most of its oil, as local production accounted for only 16% of its oil 
consumption. Its refinery sector caters to about half of the domestic demand for petroleum p roducts, 
while the rest is imported. In 2019, Pakistan imported 17.97 MMT of oil, of which 9.21 MMT was 
crude oil and 8.76 MMT was refined oil. According to UN Comtrade data, in 2020 Pakistan imported 
crude oil and petroleum products (HS 2709 and 2710) for  USD 6.5 billion (less than half of the 2013 
level at USD  14.7 billion), primarily from the United Arab Emirates (54%), the Kingdom of 
Saudi  Arabia (13.7%), and the State of Kuwait (12.9%).  
4.96.   At 2021/22, Pakistan's MFN tariff on crude oil is 3% (up from 1% i n 2014/15), while tariffs 
on petroleum products range from 0 -20%. The authorities state that tariff rates for crude oil and 
petroleum products were reduced, through the Finance Act 2021 -22, from 3% to 2.5% and from 
0-20% to 0 -10%, respectively. The petrole um levy continues. The maximum limit of the levy went 
up from PKR 10/litre to PKR 30/litre in 2018/19, through the Finance Act 2018 -19. However, 
according to the authorities, the actual rate of levy keeps changing. The Government maintains a 
strategic petr oleum reserve equivalent to about 20 days of consumption.  
4.97.   Pakistan also exports crude petroleum and petroleum products. In 2020, their (HS 2709 and 
2710) export value was USD  188.9 million, much less than the USD  525.5 million in 2013. Its main 
export mark ets were the United Arab Emirates (56.2%), Malaysia (11.6%), the Republic of Korea 
(10.8%), and Singapore (9.4%).  
4.98.   There are currently six refining companies in Pakistan. Two are majority owned by the 
Government or an SOE33, while the rest are privately own ed. They have rather low refining 
technologies.34 On 27  April 2018, the Government approved a package of incentives for all domestic 
new (non -second -hand/non -relocated) deep conversion oil refining projects, and an expansion 
 
31 Ministry of Energy (2020), Development Plan for Pakistan Oil and Gas Industry 2020 . Viewed at: 
http://www.mpnr.gov.pk/SiteImage/Publication/1389(20)Development%20Plan%20New%20Mail%20on%201
1-11-2020%20(2nd%20Draft). pdf.  
32 Ministry of Energy (2020), Development Plan for Pakistan Oil and Gas Industry 2020.  
33 Pak Arab Refinery Ltd is 60% owned by the Government, and Pakistan Refinery Limited is 66% owned 
by Pakistan State Oil.  
34 Ministry of Energy (2020), Development Plan for Pakistan Oil and Gas Industry 2020.  WT/TPR/S/424 • Pakistan  
 
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  project of existing refineries whose minimum size is up to 100,000  barrels per day. The main 
incentives take the form of:  
• an income tax exemption for 20 years;  
• an exemption from import tariffs, surcharges, and other taxes on refinery -related 
equipment, construction materials, construction machinery, and personnel services 
required for imports;  
• an exemption from sales and consumption taxes on equipment, materials, and services 
produced domestically; and  
• other projects supporting imports of facilities and pipelines.35 
4.99.   The authori ties state that foreign investment is allowed in the oil and gas sectors.  
4.100.   Oil consumption has been declining since 2018, when the Government issued a policy of 
substituting oil -based power generation with gas -based generation. The authorities indicate that  
consumption has been increasing recently due to higher demand for gasoline and high -speed diesel.  
4.101.   OGRA sets prices of petroleum products in accordance with a formula that includes the import 
parity price based on Arab Gulf FOB market prices, transport cos ts, a dealer margin, and taxes. It 
also facilitates the Government to check the accuracy of Pakistan State Oil's import price.  
4.3.2.1.2   Natural gas  
4.102.   Pakistan's  natural gas reserves were estimated at 20.95 trillion cubic feet (TCF) as of 
30 June 2021, down from 21.45  TCF in 2019. In 2021, total natural gas supply was 4,114 MMCFD 
(million cubic feet per day), of which 73% was produced locally while 27% imported. The power 
sector is the largest consumer of natural gas, followed by the residential sector and the fertiliz er and 
industrial sectors.  
4.103.   In 2020, Pakistan imported liquefied gas for USD  2.4 billion, of which 85% was LNG, mainly 
from Qatar (54.8%), Oman (9.1%), the Islamic Republic of Iran (6.8%), the United  States (6.3%), 
and Egypt (5.3%). The MFN tariff on LNG (H S 2711.1100) was 11%, while that on other types of 
liquefied gas was duty -free. 
4.104.   Pakistan has an extensive gas infrastructure covering the entire country. This infrastructure 
includes gas transmission and distribution pipelines, LNG regasification terminals , and auxiliary 
equipment and systems. Currently, Pakistan has two operating LNG terminals, each has a  
regasification capacity of 1,440 MMCFD. In January 2021, OGRA granted provisional licences to two 
private companies (i.e. Daewoo Gas Pvt Ltd (DGPL) and L NG Easy Pvt Ltd) for them to undertake 
LNG virtual pipeline projects.36 In April 2021, OGRA granted construction licences to two private 
companies (i.e. Energas Terminal Pvt Ltd (ETPL) and Tabeer Energy Pvt Ltd (TEPL)) to develop LNG 
importation and regasi fication at Port Qasim.  
4.105.   In addition to the Onshore Petroleum (Exploration & Production) Rules 2013, Offshore Rules 
are also being formulated. These two rules would provide the regulatory framework for all 
exploration and production activities. A model petr oleum concession agreement (PCA) for onshore 
and a model production sharing agreement (PSA) for offshore stipulate incentives and obligations of 
the parties. According to the authorities, these incentives include exemption of customs duties on 
the imports of machinery and equipment, government guarantee for the entire gas production 
offtake, and a price fixed by the Government at USD  9 per MMBTU.  
4.106.   Licences are awarded via three procedures:  
a. the granting of Petroleum Exploration Licenses for entering into a PCA or a PSA in 
relation to onshore and offshore blocks, offered through competitive bidding;  
 
35 Ministry of Energy (2020), Development Plan for Pakistan Oil and Gas Industry 2020.  
36 LNG virtual pipelines substitute physical pipelines whereby gas is not transported by pipelines, rather, 
they are transport ed to the point of use by sea, road, rail, or via multimode.  WT/TPR/S/424 • Pakistan  
 
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  b. the granting of Petroleum Exploration Licenses for entering into a PCA or a PSA in 
relation to onshore and offshore blocks, without competitive bidding, offered to 
Strategic Partner Companies on a government -to-government basis37; and  
c. the granting of non -exclusive Reconnaissance Permits for undertaking studies and 
multi-client surveys after negotiat ion. 
4.107.   Pakistan has a regulated gas pricing regime. OGRA sets maximum prices of gas for various 
types of consumers, e.g. residential, commercial, and industrial including for cement, fertilizer, and 
chemical factories.  Gas prices reflect, inter alia , produce rs' gas price, excise duty, transmission and 
distribution costs, depreciation, return on assets in line with market financial indicators, and a gas 
development surcharge.38 Consumer gas prices are reviewed regularly . Residential consumers are 
cross-subsidi zed by industrial, power, and commercial gas users.  
4.108.   The Natural Gas (Regulated Third Party Access) Rules 2012 establishes principles for allowing 
access to natural gas pipelines. At the time of the previous Review, transmission and distribution 
were domina ted by two state -owned companies, Sui Southern Gas Company and Sui Northern Gas 
Pipelines.39 The Government has been reforming the gas sector by opening it to third parties and by 
promoting importation of pipeline gas and LNG. The Pakistan Gas Network Code  was developed with 
the objective of establishing a uniform, contracted framework for third -party access arrangements 
in the country and the use of gas pipeline transportation system.  
4.3.2.2   Electricity  
4.109.   The Power Division under the Ministry of Energy is in charge of formulating policies for the 
electricity subsector. The National Electric Power Regulatory Authority (NEPRA) is the regulator. 
NEPRA licences generation, transmission, and distribution companies; suggests tariffs to the 
Ministry; and prescribes s tandards. Tariffs are different for residential, commercial, industrial, and 
agricultural consumers. Residential tariffs depend on the household's total electricity consumption.  
4.110.   The State plays an important role in the electricity generation, transmission,  and distribution 
process. The Water and Power Development Authority (WAPDA), an SOE, generates hydroelectricity, 
while state -owned generation companies (GENCOs) generate thermal power. Independent power 
producers (IPPs) continue to increase in importance.  In 2021, thermal had the largest share in the 
installed electricity generation  capacity,  followed by hydro (Table  4.14).  
Table 4.14 Installed power generation capacity, 2017 -21 
 2017  2018  2019  2020  2021  
Total installed capacity (MW)  28,712  35,979  38,995  38,719  39,772  
Thermal (%)  66.1 66.8 65.8 65.2 63.1 
Hydro (%)  24.8 24.2 25.0 25.5 24.9 
Nuclear (%)  4.0 4.1 3.8 3.8 6.6 
Renewable energy (wind, solar, and 
bagasse) (%)  5.1 4.9 5.4 5.5 5.4 
Source:  NEPRA (2021), State of Industry Report 2021 . Viewed at: 
https://nepra.org.pk/publications/State%20of%20Industry%20Reports/State%20of %20Industry%2
0Report%202021.pdf  
4.111.   According to NEPRA's State of Industry Report 2020, the addition of renewable energy 
projects has accelerated in the power sector recently. However, according to Table 4.15, electricity 
generated from renewable energy declin ed from 7,955 GWh in 2019 to 2,322 GWh in 2020 and 
2,294 GWh in 2021. According to the authorities, the difference comes from a change in reporting 
periods. Difficulties facing the inclusion of renewable energy power plants include the requirement 
of back -up power generation capacity40, and added cost of transmission lines due to the remote 
 
37 The Government may assign "Strategic Partner" status to national oil companies representing a 
foreign government on a government -to-government negotiation basis.  
38 Ministry of Energy (2020), Development Plan for Pakistan Oil and Gas Industry 2020.  
39 WTO document WT/TPR/S/311/Rev.1, 2  June 2015.  
40 The authorities indicate that renewable energy power plants generate power intermittently and thus 
require energy storage equipment or back -up generati on capacity.  WT/TPR/S/424 • Pakistan  
 
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  locations of wind plants.41 The Government set a target of 20% renewable energy capacity by 2025 
and 30% by 2030 in the national grid. Given that in 2021 electricity gen erated from renewable 
energy accounted for 2.2% of total electricity generation, NEPRA recently approved an Indicative 
Generation Capacity Expansion Plan (IGCEP) that aims to add new generation capacity over a 
10-year horizon.  
Table 4.15 Electricity generation, 2019 -21 
(GWh)   
2019  
(July -April)  2020  
(July -April)  2021  
(July -April)  
Thermal  61,003  56,320  61,052  
Hydro  24,931  29,799  31,357  
Nuclear  2,903  7,941  8,038  
Renewable  7,955  2,322  2,294  
Total  96,792  96,382  102,742  
Source:  Finance Division (2021), Pakistan Economic Survey 2020 -21. 
4.112.   Transmission is mainly undertaken by another SOE, the National Transmission and Despatch 
Company (NTDC), while transmission in Karachi is handled by K -Electric (KE).42 Accor ding to NEPRA, 
the existing NTDC transmission network causes underutilization of the efficient power plants. Many 
power plants face problems in evacuation of electric power that could be generated. Under the 
Energy Purchase Agreements (EPAs), in the event of failure to offtake the available energy from 
renewable energy power plants, the plants are eligible for payments on account of Non -Project 
Missed Volume. Thus, a robust transmission system that ensures full evacuation of electric power 
for transmission across the country would result in cheaper power.43 
4.113.   As at 30  June 2020, there were 10 state -owned power distribution companies, each 
exclusively responsible for supply of electricity in its respective area. In addition, KE also possesses 
the distribution l icence to supply electricity in its designated area. The authorities indicate that these 
exclusive rights are to expire in the next one to two years. Hence, the Government is in the process 
of preparing a road map for a Competitive Trading Bilateral Contra ct Market (CTBCM) and an initial 
wholesale market for bulk power consumers.  
4.114.   During the review period, a number of reforms were undertaken with a view to transforming 
the power sector to a competitive market. In 2015, a Central Power Purchasing Agency -Guara ntee 
(CPPA -G) was established. It was separated from the NTDC to purchase power from electricity 
generators. In 2018, the NEPRA Act was amended, and the amendment emphasizes developing an 
electric power market and reducing regulatory oversight. Before 2018 , the distribution of electricity 
included the wire business, as well as sale of electricity to end -consumers. Since the promulgation 
of the NEPRA (Amendment) Act 2018, the sale of electricity has required a separate Electric Power 
Supply Licence. Existing  distribution licensees hold their licence for supply of electric power for 
five years from coming into effect of the NEPRA (Amendment) Act 2018. Similarly, the power trader 
licence was introduced for wholesale trade of electricity. Provinces are also elig ible to develop their 
own transmission system for power transmission within the province.  
4.115.   Under the NEPRA  (Amendment) Act 2018, the Government is required to prepare a national 
electricity policy for the development of power markets, and a national electricity plan to implement 
the policy. The authorities state that the National Electricity Policy 2021 was de veloped, and the Plan 
is being developed. In particular, the Policy and the Plan aim to address the following issues:  
• High cost of electricity: The cost of electricity for end -consumers increased during the 
review period owing to, inter alia, high transmis sion and distribution losses, low 
recovery, circular debt, large capacity payments, currency devaluation, fuel cost, and 
underutilization of efficient power plants.  
 
41 National Electric Power Regulatory Authority (NEPRA) (2020), State of Industry Report 2020 . 
42 KE is a privatized and vertically integrated utility, possessing three separate licences issued by NEPRA 
on power generation, transmission, and dis tribution within its service area.  
43 National Electric Power Regulatory Authority (NEPRA) (2020), State of Industry Report 2020 . WT/TPR/S/424 • Pakistan  
 
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  • Circular debt: Poor recovery of dues in the electricity subsector's supply chain. For 
examp le, the inability of distribution companies to pay their dues hinders the ability of 
power generation and transmission companies to pay, for example, fuel suppliers to 
settle import bills.  
• Underutilization of some power plants: Information provided by the NPCC and CPPA -G 
reveals underutilization of various efficient power plants and burning of gas in less 
efficient power plants. This not only deprives the country of available cheaper electricity 
but also increases the burden in the form of capacity payments  for unutilized capacity.  
• Inefficient public sector power GENCOs: The efficiency of GENCOs' old power plants has 
deteriorated over time. In FY2019/20, the total generation of GENCOs was 
7,907.91  GWh, much lower than the previous year's generation of 13,016 .93 GWh. Low 
efficiencies cause inefficient burning of fuel and increase the cost of generation.  
• Operation of power plants on part load: Partial loading of power plants due to, inter alia, 
transmission constraints, back -up capacity to meet the intermittency of renewable 
projects, lack of demand, and start -up and shutdown issues with steam power plants  
also contributes to the high cost of electricity.  
• Levies on primary energy used for power generation: Levies, charges, and surcharges 
on fuel used for power generation increase the cost of generation.  
• Centralized control of distribution companies (DISCOs)  and GENCOs: When PEPCO was 
created in 1998, it was tasked to unbundle WAPDA into DISCOs and GENCOs, and help 
them become self -sufficient and ready for privatization. Then GENCO Holding Company 
Limited (GHCL) was established on 9  February  2021 to oversee o perations of 
public -sector GENCOs. Though incorporated as companies, DISCOs and GENCOs have 
not been converted into commercially viable independent business entities. They are 
still tied centrally to PEPCO and the GHCL for decision -making.  
• High transmissio n and distribution losses: Some DISCOs have double -digit losses, which 
increase the cost of electricity. Power transmission and distribution are highly inefficient, 
due to poor infrastructure, mismanagement, and theft of electricity. In FY2020/21, 
distribu tion losses were at 17.9%, while transmission losses were at 2.57%.  
4.116.   In 2019, about 26% of the population did not have access to electricity, down from 29% in 
2015.44 This was partly explained by the increase in power generation capacity. According to the 
NEPRA Tariff Standard and Procedure Rules 1998, the authority determines the tariff for all 
generation, transmission, and DISCOs. Electricity tariffs in Pakistan remain high for various 
reasons.45 
4.117.   Pakistan's electric grid is connected only to that of the Is lamic Republic of Iran, and for 
FY2020/21 about 498.37 GWh units of electric power were imported from Iran. The MFN tariff on 
electricity is 3%, up from 1% in 2013.  
4.4  Manufacturing  
4.4.1   Main features and recent developments  
4.118.   According to the Pakistan Economic Surv ey published by the Finance Department, Pakistan's 
manufacturing is classified into three groups:  
• large-scale manufacturing (LSM), accounting for 76% of the manufacturing sector in 
terms of value -added;  
 
44 World Bank database, Access to Electricity (% of Population) . Viewed at: 
http://data.worldbank.org/indicator/EG.ELC.ACCS.ZS . 
45 State Bank of Pakistan (2019), The State of Pakistan's Economy, Third Quarterly Report for FY19 – 
Special Section 1: Why Are Power Tariffs in Pakistan Consistently High?  Viewed at: 
https://www.sbp.org.pk/reports/quarterly/fy19/Third/qtr -index -eng.htm .  WT/TPR/S/424 • Pakistan  
 
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  • small -scale manufacturing (SSM), covering industrial and household units engaged in 
manufacturing activity with less than 10 employees, accounting for 16.6% of the 
manufacturing sector; and  
• slaughtering, accounting for 7.4% of the manufacturing sector.46 
4.119.   After declining to 7.4% in FY2019/20, the manufacturin g sector recorded a high growth rate 
of 8.7% in FY2020/21. It contributes around 12.5% to the GVA  and employs about 15% (FY2018/19) 
of the labour force (Table 1.2).  
4.120.   Imports of manufactured products (HS Chapters 25 -97 (+99)) amounted to USD  38.8 billion 
in 2020, down from USD  39.2 billion in 2013. Main imports are machinery and electrical equipment, 
chemicals, and base metals and articles thereof. Exports of manufactured products also declined, 
from USD  19.6 billion in 2013 to USD  17.6 billion in 2020. Texti les and clothing are by far the most 
important export product, followed by base metals and articles thereof.  
4.121.   In Pakistan, approximately 10 manufacturing enterprises are state -owned; these include 
Pakistan Steel Mills and Heavy Electrical Complex, although the Government plans to privatize some 
of them. Pakistan Steel Mills, which is 100% owned by the Government, is scheduled to be privatized 
by the end of 2021 (Sections 1.2.4.2 and 3.3. 6.2). 
4.4.2   Policy, institutional, and regulatory developments  
4.122.   The MOIP formul ates policies for the manufacturing sector. During the review period, an 
Automotive Development Policy 2016 -2021 was adopted in 2016, and a Mobile Device Manufacturing 
Policy and an Electric Vehicle Policy were adopted in 2020. The Government has been usin g both 
border measures and domestic policies to support the development of the manufacturing sector and 
to promote export.  
4.4.2.1   Border measures  
4.123.   In addition to tariffs, border measures also include SROs, import/export restrictions, and 
RDs on imported or exporte d products.  
4.124.   As at 2021/22, the average MFN tariff on manufactured goods (ISIC Rev.2 definition) is 
12.5%, with tariffs ranging from 0 to 100% (down slightly from 14.8% in 2015). Some tariffs are 
used as policy tools to encourage the development of domestic  processing industries: for example, 
Pakistan imposes a higher tariff rate (35%) on imports of automotive parts that compete with 
domestically manufactured products than on imports of automotive parts with no domestic 
competition (20%).47 The authorities s tate that the current tariffs on automobiles represent 
incentives for the localization of auto parts.  
4.125.   Some manufactured goods have been subject to ad hoc  changes under SROs. In 
January  2016, Pakistan eliminated the Federal Board of Revenue's (FBR) authority to issue new 
SROs and transferred the authority to the MoC. According to the authorities, SROs are instruments 
of delegated legislation, and a Tariff P olicy Board (TPB) was set up to make decisions on tariff 
changes . The TPB's decisions are submitted to the Federal Cabinet for approval, and then notified in 
the form of SROs to implement the decisions (Section 3.1.3.6). Products affected by SROs include 
cotton fabrics, finished leather, and vehicles.48 
4.126.   Manufactured imports have been facing anti -dumping measures. Currently, goods on which 
anti-dumping measures are imposed include hydrogen peroxide, certain uncoated writing and 
printing paper, cold rolled co ils/sheets, polyester staple fibre, galvanized coils/sheets, continuous 
casting steel billets, one -sided coated duplex board with grey back, coated bleached board/folding 
box board with white back, polyester filament yarn, tiles, deformed concrete reinforc ing steel bars, 
 
46 Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf .  
47 United  States Trade Representative (2021), 2021 National Trade Estimate Report on Foreign Trade 
Barriers. Viewed at: https://ustr.gov/sites/default/files/files/reports/2021/2021NTE.pdf .  
48 FBR, SRO. Viewed at: https://fbr.gov.pk/ShowSROs?Department=Sales%20Tax .  WT/TPR/S/424 • Pakistan  
 
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  sulphonic acid, polyvinyl chloride (suspension grade), colour coated steel coils/sheets, lead pencils, 
tinplate, sorbitol 70% solution, cotton yarn, and inorganic yellow chrome pigments (Section 3.1.6).  
4.127.   The following used/second -hand items are not allowed to be imported into Pakistan: boilers; 
compressors; air conditioners; refrigerators; hand tools; household and other type of machinery; 
machinery parts (with some exceptions); sugar plants, cement plants, oil refinery, chemical plants, 
thermal power plants, hyd ro power plants, cranes, road rollers and machine tools, manufactured 
locally; vehicles; auto parts; apparatus and appliances; among others (Table A3.5).  
4.128.   Pakistan prohibits the exports of urea and fertilizers. The authorities indicate that this is to 
ensure domestic demand.  
4.129.   The Government encourages the exportation of manufactured products by providing various 
incentives, including assistance to exporters through the Export Development Fund and a duty 
drawback scheme  (Section 3.2.4). In  FY2021, the Central Bank (State Bank of Pakistan (SBP)) 
introduced some relaxations under the export finance scheme (EFS) and long -term financing facility 
(LTFF), with a view to facilitating export -oriented industries during the COVID -19 pandemic 
(Section  3.2.5). Six  additional months were allowed for making shipment/performance under the 
EFS with a 1.5  times export performance (2 times earlier). Eligibility criteria for obtaining financing 
under the LTFF were reduced from USD  5 million or 50% exports of t otal sales to USD  4 million or 
40% exports of total sales from January to September 2020.49 
4.130.   In FY2021, the Government passed PKR  1.13 billion in incentives to the private sector by, 
inter alia , the removal of RDs and additional custom duties (ACDs) on various items, especially raw 
materials:  
• On 13  October  2020, the Government removed RDs and ACDs  on 164 tariff lines of raw 
materials for textiles.  
• On 23  December  2020, the 5% RD on cotton yam was removed, and the tariff rate on 
cotton yarn was lowered from 10% to 5%.  
• On 5 May 2021, customs duties (5% and 8%) and ACDs (2%) on cotton yarn were 
removed . 
4.131.   From July 2020 to March 2021, the Government released PKR  7.5 billion under its duty 
drawback scheme for the textile and non -textile sectors.50 
4.4.2.2   Domestic support  
4.132.   The Government supports the industrialization of the economy. Given that the manufacturing 
sector has particularly suffered from power cuts and high electricity prices, these support measures 
include:  
• PKR 20 billion to the Power Division of the Ministry of Energy, to "rationalize" electricity 
and gas tariffs to industries such as textiles, leather , carpets, surgical instruments, and 
sports goods.  
• PKR 22 billion to the Power Division to implement changes to electricity tariffs as 
envisaged in the Industrial Support Package for industrial consumers of power DISCOs 
and KE. According to the package, "p eak hour tariff rates have been abolished, along 
with reduced tariffs on additional electricity consumption".51 
 
49 Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf .  
50 Finance Division (2021), Pakistan Economic Survey 2020 -21. View ed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf .  
51 Industrial consumers are charged electricity on the basis of "time of use", and peak hours and 
off-peak hours are charged diffe rently. The authorities state that consumption is being charged at off -peak 
rates during the period from May 2021 to June 2022. For consumption over and above the consumption in the 
base period (March 2019 -February 2020), a fixed rate of 12.96/kWh is charg ed. WT/TPR/S/424 • Pakistan  
 
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  • Within the PKR  1.24 trillion stimulus package introduced to support the economy during 
the pandemic, PKR  100 billion was refunded to exporters t o support export -oriented 
industries.52 
• PKR 36 billion is allocated to housing finance for the purpose of purchasing, 
constructing, and ex panding  residential units. This may translate into growth in cement 
industry.  
• Tax reductions and exemptions for the ma nufacturing of electric vehicles (EVs) were 
granted from 1  July 2020.  Import tariff on EV parts was reduced to 1%, while that on 
plants and machinery for EV manufacturing became duty -free also from 1  July 2020.  
4.133.   In addition, the Mobile Device Manufacturing Policy was approved on 2  June 2020 to promote 
local manufacturing and assembly of mobile handsets. The Government aims to make the mobile 
phone manufacturing industry larger than the automobile industry in terms of turnover. Incentives 
under the Policy inc lude: 
• the removal of RD for complete -knockdown (CKD) and semi -knockdown (SKD) 
manufacturing by Pakistan Telecommunication Authority (PTA) -approved 
manufacture rs, which may obtain concessions determined by the Input Output 
Coefficient Organization53 (IOCO);  
• the removal of fixed income tax for the manufacturing of CKD/SKD mobile devices with 
values up to USD  350; 
• the setting of the fixed income tax on the manufacturing of CKD/SKD mobile devices 
with a value between USD  350 and USD  500 at PKR 5,000, and at PKR  11,500 for those 
with values over USD  500; 
• a significant reduction in sales tax on the manufacturing of CKD/SKD mobile devices 
with a value below USD  200; and  
• allocation of an R&D allowance to local manufacturers for exports of mobile phones.  
4.134.   The authorities consider that regional trade agreements, in particular the one between 
Pakistan and China, would increase demand for Pakistan's exports of textiles, prepared food, leather, 
chemicals, and engineering goods, and would thus boost LSM.54 
4.135.   In ad dition, from July 2020 to March 2021, the SBP adopted measures to boost the 
manufacturing sector. The measures include COVID -19 refinance schemes such as:  
• the Temporary Economic Refinance Facility (TERF), which provided financing to all 
sectors of the econ omy except the power sector (terminated on 31  March  2021);  
• the Rozgar scheme, which financed wages and salaries of employees for six months 
(April -September 2020) for businesses except for government entities, public -sector 
enterprises, autonomous bodies, and deposit -taking financial institutions; and  
• the Refinance Facility for Combating COVID -19 (RFCC), under which loans were made 
to hospitals, medical centres, and manufacturers of, inter alia , masks, protective 
clothing, testing kits, hospital beds, and v entilators. As of 25  March  2021, 
PKR 16.7 billion had been requested under the RFCC, against which PKR  10.5 billion had 
been approved.  
 
52 Finance Division (2021), Pakistan Economic Survey 2020 -21. 
53 IOCO allows tracing of manufacturing parts and determines concessions under the Mobile Device 
Manufacturing Policy.  
54 Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf .  WT/TPR/S/424 • Pakistan  
 
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  4.4.3   Key subsectors  
4.4.3.1   Textiles and clothing  
4.136.   Textiles is the most important manufacturing sector of Pakistan and has the longest 
production chain, from cotton to ginning, spinning, fabric, dyeing and finishing, made -ups, and 
garments. This sector contributes nearly one fourth of industrial value -added, provides employment 
to about 40% of the industrial labour force, and accounts for  about 60% of exports.55 
4.137.   Exports of textiles and textile articles amounted to USD  13.1 billion in 2020, down from 
USD 13.7 billion in 2013. The most important subcategories are clothing (USD  5.7 billion), bed and 
table linen (USD  3.6 billion), and cotton y arn (USD  0.8 billion). Pakistan's exports of textiles and 
textile articles depend strongly on market access conditions in major trading partners, including 
unilateral preferences.  
4.138.   Imports of textiles and textile articles amounted to USD  3.3 billion in 2020 , up from 
USD 2.7 million in 2013.56 As at 2021/22, the average MFN tariff on textiles and textile articles 
(HS Section 11) is 13.4% (down from 18.7% in 2014/15), with tariffs ranging from 0% to 20%.  
4.139.   The Textile Wing (previously the Textile Industry Divisi on) under the MoC is in charge of 
formulating policies for the textiles sector. A Textiles Policy 2014 -19 was formulated in 2015.  The 
Policy aims to build Pakistan as a leading country in the export of value -added textile products. Goals 
set up in the Poli cy include, inter alia, double value addition in five years, double exports in five 
years, and facilitation of additional investment. To reach these targets, various tax supports and 
vocational training were envisaged. The authorities indicate that the tar gets were not fully achieved. 
For example, exports of value -added textile products (knitwear and readymade garments) increased 
by approximately 33% from USD  4.2 billion in 2014 to USD  5.6 billion in 2019. According to the 
authorities, this was mainly due t o delayed or no payments under the respective facilitation schemes, 
non-allocation of funds for infrastructure development, lack of vocational training, productivity  
issues , compliance -related programmes, and non -availability of energy to export industry at 
regionally competitive rates during the policy period.  
4.4.3.2   Automotive sector  
4.140.   According to the Pakistan Economic Survey, production of automobiles has been depressed 
since the introduction of new taxes such as federal excise duties and ACDs in FY201 9, the impact of 
the COVID -19 pandemic, and exchange rate fluctuations (Table 4.16).57 Output levels have been 
recovering since the second half of 2020.  
Table 4.16 Production in the automotive sector, FY2014/1 5-FY2020/21  
Product  FY2014/15  FY2015/16  FY2016/17  FY2017/18  FY2018/19  FY2019/20  FY2020/21 
Cars 152,524  179,944  186,936  218,490  211,365  98,181  66,201  
Buses  973 1,394  1,339  1,056  1,139  623 326 
Tractors  45,862  33,982  47,799  71,894  49,902  22,023  23,376  
Motorcycles  1,770,239  2,060,385  2,473,687  2,761,747  2,437,871  1,659,495  1,323,169  
Source:  Ministry of Industries and Production.  
4.141.   Imports of automotive products and other transport equipment (HS Section 17) amounted 
to USD  1.7 billion in 2020 (down from USD  2.6 billion in 2013), whereas exports stood at only 
USD 0.08 billion (up slightly from USD  0.06 billion in 2013). This sector attracts the highest tariff 
levels of all goods, as high as 100% (same as in 2015). The simple average MFN tariff r ate for 
vehicles (HS 87) was 45.2% as at 2021/22, with tariffs ranging from 3% to 100%. Tariffs for most 
components are 35% (same as in 2014/15), while tariffs on motorcycles are 50% (down from 65% 
in 2014/15). The highest rate of 100% applied for certain motor vehicles of a capacity exceeding 
1,800  cc. 
 
55 Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_2020_21.pdf .  
56 Trade fi gures are based on HS Section 11 classification including HS Chapters 50 -63.  
57 Finance Division (2021), Pakistan Economic Survey 2020 -21. Viewed at: 
https://www.pc.gov.pk/uploads/cpec/PES_ 2020_21.pdf .  WT/TPR/S/424 • Pakistan  
 
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  4.142.   Used vehicles may be imported under a special regime where  taxes are levied on the basis 
of engine capacity (Table 4.17). Buses, vans, and trucks are excluded from this regime.  
Table 4.17 Taxes for imported vehicles (special regime), 2020/21  
Type of vehicle  Taxes (USD)  
Up to 800 cc  4,800  
From 801 cc to 1000 cc  6,000  
From 1,001 cc to 1,300 cc  13,200  
From 1,301 cc to 1,500 cc  18,590  
From 1,501 cc to 1,600 cc  22,550  
From 1,601 cc to 1,800 cc excluding jeeps  27,940  
Source:  Federal Board of Revenue.  
4.143.   High levels of protection at the border, limited competition domestically, and little technology 
transfer all result in high final prices for Pakistani consumers. For imported vehicles, consumers need 
to pay the c.i.f. value plus its customs tariff (60% of the c.i.f. value), a sales tax (17.5% of the sum 
of the c.i.f. value and the customs duty), an income tax (5% of c.i.f. plus custo m duty and sales 
tax), and excise duty (1% of c.i.f. plus custom duty). Prices of imported vehicles are significantly 
higher than in other countries.  
4.144.   In March 2016, the MOIP adopted Pakistan's Automotive Development Policy (ADP) 2016 -21, 
with a view to pro moting competition in the market by,  inter alia, offering various incentives 
including tax holidays to new entrants. The automobile market used to be highly concentrated and 
was dominated by three multinational firms. Hence, following the issuance of the A DP 2016 -21, the 
Government approved 21 new investors to manufacture automobiles in Pakistan, and 9 of them 
started local manufacturing already. Although the ADP 2016 -21 expired on 30  June 2021, the 
benefits for local manufacturing end on 30  June 2026.  
4.145.   According to the authorities, the ADP 2016 -21 is to be replaced by the Automotive Industry 
Development Export Policy 2021 -26, under which the excise duties and sales tax are to be revised 
with a view to accelerating overall growth of the industry.  
4.146.   Furthermore,  the Government approved its first EV policy in June 2020, which offers lower 
tax rates and customs tariffs on EVs and charging equipment. For example, the goods and services 
tax (GST) is applied at a rate of 1% on EVs, and a rate of 17% on non -EVs; the cu stoms duty is 
applied to charging equipment at a rate of 1%, while import of plant and machinery for EVs 
manufacturing would be duty -free. 
4.4.3.3   Cement  
4.147.   Pakistan's cement industry has continued to grow, while demand has been driven by the 
construction sector. Con struction activities by the private sector accompanied by work at Bhasha 
and Dasu dams helped to increase local cement consumption. In April 2020, the Government 
introduced an incentive package for the construction industry, including an amnesty scheme, ta x 
exemptions, and a PKR  36 billion subsidy on housing finance (which may translate into growth in 
the cement industry). For example, the excise duty on cement was reduced (from PKR  2/kg to 
PKR 1.5/kg).58 Banks were advised to lend at least 5% of their domestic private sector advances to 
the housing and construction sector. According to the Pakistan Economic Survey, the cement 
industry has posted the highest -ever year -over-year growth of 44.6% in March  2021 due to a 
massive increase in domestic consumption as well as exports.59 
4.148.   Pakistan remains a big exporter, although the export value of cement decreased from its 
peak years. In 2020, exports amounted to USD  257.3 million (less than half of the 2013 level o f 
USD 529 million). Its main export markets are Bangladesh, Afghanistan, and Sri Lanka. In the same 
year, it imported USD  4.4 million worth of cement (down from USD  6.5 million in 2013). The simple 
average applied MFN tariff on cement is 20% (except for ce ment clinkers at 11%) as at 2021/22.  
 
58 Finance Division (2021), Pakistan Economic Survey 2020 -21. 
59 Finance Division (2021), Pakistan Economic Survey 2020 -21.  WT/TPR/S/424 • Pakistan  
 
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  4.5  Services  
4.5.1   Recent developments  
4.149.   Compared with the other sectors in the economy, the services sector was affected the most 
by the COVID -19 outbreak, owing to falling tourism revenues; lower mobility in the transport sector;  
and the closure of education institutions, event management services, and entertainment and 
community services. Its recent recovery was uneven: the demand for health services and 
e-commerce is increasing, while that for tourism services still lags behind.  
4.150.   In 2020/21, services contributed 56.2% of GVA and accounted for 3 7.8% of total 
employment (in 2018/19) (Table 1.2). Wholesale and retail trade, and transport, storage, and 
communications have remained the leading services activities.  
4.151.   Pakistan is a net imp orter of services. During the review period, imports of services reached 
a peak in 2017/18, while exports remained relatively stable (Chart 4.5).  
4.152.   In 2020/21, telecommunications, computer, and information services became the largest 
services sector in terms  of export value (Table 1.4). Exports of government goods and services and 
transportation services have been declining rapidly. Service imports are dominated by transport 
services and other business services.  
Chart 4.5 Trade in services, 2014/15 -2020/21  
 
Source:  State Bank of Pakistan. Viewed at: https://www.sbp.org.pk/ecodata/index2.asp . 
4.5.2   GATS and regional trade agreement (RTA) commitments  
4.153.   Pakistan's co mmitments under the GATS remained unchanged during the review period.60 
Its GATS Schedule of Specific Commitments covers 47  activities (out of a potential of 166) within 
financial (banking and insurance), business, communications, construction/engineering,  health, and 
tourism/travel services.61 Pakistan's particular interests in services lie in getting predictable market 
access, particularly in Modes 1 and 4.  
 
60 In the context of the DDA, Pakistan submitted an initial service offer in 2005 (WTO document 
TN/S/O/PAK, 30  May 2005) . 
61 WTO documents GATS/EL/67, 15  April 1994; GATS/EL/67/Suppl.1, 11  April 1997; and 
GATS/EL/67/Suppl.2, 26  February  1998. Some of the general (i.e. horizontal) market -access and national -
treatment limitations listed in Pakistan's Schedule relate to commerc ial presence (e.g. limitations on foreign 
equity) or the presence of natural persons (e.g. presence of foreign executives or specialists, expenses of 
representative offices, and authorization for acquisition of real estate by foreign firms). Cross -border s upply of 
services is unbound for nearly all sectors. Commercial presence in certain sectors (e.g. insurance, banking) is 
subject to equity limits or other specific conditions. Pakistan listed MFN exemptions in financial services to 
preserve reciprocity req uirements, Islamic financing transactions, and joint ventures among Economic 
Cooperation Organization countries, as well as in telecommunications, favouring countries or operators with 
bilateral agreements with Pakistan Telecommunication Company Limited on  accounting rates.  
02,0004,0006,0008,00010,00012,00014,000
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21Total credit (USD million)
Total debit (USD million)Chart 4.[PAK] Trade in services, 2014 -21
Source:  State Bank of Pakistan.  Viewed at:  https://www.sbp.org.pk/ecodata/index2.asp.WT/TPR/S/424 • Pakistan  
 
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  4.154.   Pakistan adopted services liberalization commitments under various RTAs with a view to 
achieving a higher -level liberalization that goes beyond its GATS commitments (Section 2.3.2). 
These include the Pakistan -Malaysia RTA, and the Pakistan -China RTA  (CPFTA) . 
4.5.3   Financial services  
4.155.   The financial services sector remained resilient in 2020/21. The consolidated asset base of 
the financial sector rose by 14.1% in 2020, and financial depth, measured by financial assets to GDP 
ratio, further increased to 77.5%, up from 71.7% in 2016.62 The financial services sector contributed 
to 2% of GVA in 2020/21, t he same as in 2015/16 (Table  1.2). According to the latest labour force 
survey in 2018/19, the financial and insurance sector accounted for 0.62% of total employment.63 
According to the SBP, strong capital and liquidity buffers accumulated over the years u nder prudent 
regulatory policies, timely policy interventions including relief measures announced by the SBP and 
the Government,  and an effective strategy to handle the pandemic  all supported the financial system 
to maintain its stability and to face multifaceted challenges.64 
4.156.   In addition to banks, the financial services sector in Pakistan comprises microfinance banks 
(MFBs), development finance institutions (DFIs), non -bank fina ncial institutions (NBFIs), insurance 
companies, and the Central Directorate of National Savings (CDNS) (Table 4.18). The SBP regulates 
banks, MFBs, DFIs, and exchange companies, while the SECP regulates NBFIs, insurance companies, 
and Modaraba companies ( a type of non -interest Islamic financial company).  
Table 4.18 Financial sector assets composition, 2016 -20 
  2016  2017  2018  2019  2020  
Assets (PKR billion)  21,853  24,734  26,526  29,741  33,925  
Growth rate (%) 12.6 13.2 7.3 12.1 14.1 
Year-over-year asset growth (%)       
Banks  11.9 15.9 7.3 11.7 14.2 
Microfinance banks (MFBs)  74.7 45.2 32.7 15.9 30.0 
Development finance institutions (DFIs)  9.6 9.2 4.6 58.1 16.5 
Non-bank financial  institutions (NBFIs)  15.8 -1.1 8.7 13.0 27.0 
Insurance  31.8 8.2 6.0 15.0 13.0 
Central Directorate of National Savings (CDNS)  6.7 5.6 5.3 9.4 7.5 
Percentage share in total assets (%)       
Banks  72.4 74.2 74.2 73.9 74.1 
MFBs 0.8 1.0 1.2 1.3 1.5 
DFIs 1.0 0.9 0.9 1.3 1.3 
NBFIs  5.0 4.4 4.5 4.5 5.0 
Insurance  5.7 5.5 5.4 5.6 5.5 
Central Directorate of National Savings (CDNS)  15.0 14.0 13.8 13.4 12.7 
Assets as a percentage of GDP at market price 
(%)      
MFBs 0.6 0.7 0.9 1.0 1.1 
DFIs 0.7 0.7 0.7 0.9 1.0 
NBFIs  3.6 3.3 3.2 3.3 3.9 
Insurance  4.1 4.1 3.9 4.1 4.3 
CDNS  10.8 10.4 10.0 10.0 9.9 
Banks  51.9 55.1 53.8 54.8 57.6 
Overall assets  71.7 74.3 72.5 74.1 77.7 
Source:  State Bank of Pakistan (2021), Financial Stability Review 2020 . 
 
62 State Bank Pakistan (2021),  Financial Stability Review 2020 . Viewed at: 
https://www.sbp.org.pk/FSR/2020/FSR -2020-Complete.pdf . 
63 The total sample size was 41,184 households with 99.58% response rate. (Pakistan Bureau of 
Statistics. Viewed at:  
https://www.pbs.gov.pk/sites/default/fil es//Labour%20Force/publications/lfs2018_19/Tables/Table -
20%20perc_R.pdf .) 
64 State Bank Pakistan (2021),  Financial Stability Review 2020 . Viewed at: 
https://www.sbp.org.pk/FSR/2020/FSR -2020-Complete.pdf . WT/TPR/S/424 • Pakistan  
 
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  4.157.   The financial services sector was one of the major recipients of foreign investment, 
accounting for 12% of FDI inflows in 2020/21 (Table 1.5).  
4.5.3.1   Banking  
4.5.3.1.1   Features  
4.158.   The banking subsector dominates the financial services sector, holding 74% of the financial 
sector's assets and performing the majority of financial intermediation (Table 4.18). By the end of 
2020, Pakistan had 32 banks, 29 of which were commercial banks and 3 were specialized banks. 
The 29 commercial banks comprised 4 foreign banks and  25 domestic banks (5 public sector banks 
and 20 local private banks). Among the 32 banks, 5 are Islamic banks, and 17 have Islamic banking 
branches. The commercial banking sector was dominated by privately owned banks: local banks 
hold 97.07% of total ass ets of banks ( local private banks, 77.8%; public sector banks, 18.3%; and 
specialized banks, 1% at end -December 202065), and foreign banks comprise 2.93%.66 
4.159.   The SBP is responsible for the prudential supervision and licensing of commercial banks. The 
Bankin g Companies Ordinance of 1962, as amended in 2006, is the main legislation for the sector.  
4.160.   Following the promulgation of the Deposit Protection Corporation Act 2016, the Deposit 
Protection Corporation (DPC) was established as a subsidiary of the SBP.67 The DPC formally 
commenced it business on 30  June 2018. It provides explicit and limited coverage to around 98% 
of the total depositors of the banking system. Protected deposit for eligible depositors is capped at 
PKR 500,000 per depositor per bank. It also m aintains separate funds to cover Sharia -based banking 
depositors.  
4.161.   The Central Bank has been making efforts to promote financial development and inclusion. 
The SBP developed a five -year comprehensive National Financial Inclusion Strategy (NFIS) in 2015 
with a vision to enhance inclusive economic growth. In 2018, the Government revisited the NFIS 
and made it part of the Government's 100 -day agenda. An extended NFIS action plan for the period 
of 2019 -23 lays out the vision, framework, action plan, and targeted  outcomes for financial inclusion. 
In late 2019, the SBP started consultations with external stakeholders to reduce the gender gap in 
financial inclusion,  and subsequently launched a policy called "Banking on Equality: Reducing the 
Gender Gap in Financial Inclusion" in September 2021.  In 2020, to advance fintech and digitization 
of banking operations, the SBP launched: (i)  an instant payments system (Raast), with a view to 
encouraging greater use of more secure digital payments and reducing cash transaction s when fully 
rolled out by 2022;  and (ii)  digital bank accounts (Roshan), in collaboration with commercial banks, 
which permit non -resident Pakistanis to undertake banking, payment, and investment activities in 
Pakistan.68 
4.162.   Foreign branches and wholly forei gn-owned, locally incorporated subsidiaries are permitted, 
provided that the foreign bank's home country belongs to a regional grouping in which Pakistan is a 
member or it has global Tier 1 minimum paid -up capital of USD  5 billion. Otherwise, foreign banks  
must incorporate as a local company with foreign equity capped at 49% to conduct banking business 
in Pakistan. F oreign banks are free to open any number of branches subject to fulfilment of minimum 
capital requirements (MCRs) as prescribed by the SBP.69 Banks (both local and foreign) are allowed 
to open new branches under Annual Branch Expansion Plans, of which 25% of new branches must 
be opened in rural and underserved areas including unbanked areas. Currently, there are four foreign 
 
65 State Bank of Pakistan (2020) , Financial Statement Analysis of the Financial Sector 2016 -20. Viewed 
at: https://www.sbp.org.pk/departments/stats/FSA -2016-20.pdf . 
66 State Bank of Pakistan (2020), Financial Statements Analysis of Financial Sector 2016 -2020. Viewed 
at: https://www.sbp.org.pk/departments/stats/FSA -2016-20.pdf . 
67 DPC. Viewed at: www.dpc.org.pk .  
68 IMF (2021), Pakistan: Second, Third, Fourth, and Fifth Reviews Under the Extended Arrangement 
Under the Extended Fund Facility and Request for Rephasing of Access – Press Release; Staff Report; Staff 
Supplement, and Statement by the Executive Director for Pakistan , IMF Country Report No.  21/73. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2021/04/08/Pakistan -Second -Third-Fourth -and-Fifth-Reviews -
Under -the-Extended -Arrangement -Under -the-50344 . 
69 For example, the MCR for foreign banks wishing to open up to five  branches is PKR 3 billion (free of 
losses). The MCR becomes PRK 6 billion and PKR 10 billion for foreign banks wishing to open between 6 and 
50 branches, and more than 50 branches, respectively. SBP, Guidelines and Criteria for Setting Up a 
Commercial Bank . Viewed at:  https://www.sbp.org.pk/bpd/2005/Commercial -Bank.pdf .  WT/TPR/S/424 • Pakistan  
 
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  banks: Citibank N.A.,  Deutsche Bank AG, the Industrial and Commercial Bank of China Ltd, and the 
Bank of China Ltd.  
4.163.   The three specialized banks are the Punjab Provincial Co -operative Bank Ltd (PPCBL), the 
SME Bank Ltd, and the ZTBL. The Government of Punjab holds 95% shares in  the PPCBL, while the 
Government and the Central Bank hold about 24% and 76% of shares in ZTBL, respectively. The 
SME Bank, 93.88% owned by the State, has as its primary objective to support and develop SMEs 
by providing necessary financial assistance and business support services on a sustainable basis. Its 
privatization process is under way (Section 3.3. 6.2). 
4.5.3.1.2   Recent development and prudential requirements  
4.164.   During the pandemic, the banking sector showed strong financial soundness and resilience. 
Banks' asse ts grew 14.2% in 2020, driven principally by an increase in investments in government 
securities, while private sector demand became weaker.70 
4.165.   Solvency of the banking sector remained robust. By the end of 2020, the capital adequacy 
ratio (CAR) reached 18.6%, and the Tier 1 capital to risk -weighted assets ratio reached 14.8% 
(Table  4.19). The CAR is well above the statutory minimum CAR requirement of 11.5%. Return on 
assets (ROA after tax) and return on equity (ROE after tax) rose as well, to 1.1 % and 13.8%, 
respectively.  
Table 4.19 Financial soundness indicators of the banking sector, 
December  2016 -December 2020  
(%) 
 Dec. 2016  Dec. 2017  Dec. 2018  Dec. 2019  Dec. 2020  
Capital adequacy       
Risk-weighted CAR  16.2 15.8 16.2 17.0 18.6 
Tier 1 capital to risk -weighted assets  13.0 12.9 13.2 14.0 14.8 
Capital to total assets  7.8 7.1 7.1 7.2 7.2 
Asset quality       
NPL to total loans  10.1 8.4 8.0 8.6 9.2 
Provision to NPLs  85.0 87.2 83.8 81.4 88.3 
Net NPLs to net loans  1.6 1.2 1.4 1.7 1.2 
Net NPLs to capital  7.3 5.8 7.8 8.9 5.3 
Earnings       
Return on assets (after tax)  1.3 0.9 0.8 0.8 1.0 
Return on equity (after tax)  14.4 11.5 10.7 11.3 13.8 
Net interest income/gross income  71.2 72.7 75.4 79.3 79.7 
Cost/income ratio  53.1 57.1 60.2 57.6 50.0 
Liquidity       
Liquid assets/total assets (liquid 
asset ratio)  53.7 54.0 48.7 49.7 54.8 
Liquid assets/total deposits  72.1 76.1 67.2 68.4 74.3 
Advances/deposits  46.6 50.1 55.8 51.7 44.8 
Source:  State Bank of Pakistan (2021),  Financial Stability Review 2020 . 
4.166.   A number of factors contributed to the rise in the banking sector's earnings. First, the SBP 
reduced the policy rate from 13.25% to 7.0% between 17  March  2020 and 24  June 2020 
(Section  1.2.3), with a view to  containing the impact of the pandemic on businesses and households . 
Consequently, interest expenses were lowered by 7.3% in 2020, compared to a 90.1% rise in 2019.  
 
70 State Bank of Pakistan (2021),  Financial Stability Review 2020 . WT/TPR/S/424 • Pakistan  
 
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  4.167.   Over the review period, at the quarterly level, lending rates ranged  from 6.75% to 13.79%, 
and interest spreads ranged from 2.85  percentage points to 6.13 percentage points, representing 
variations in banks' profit margins (Chart 4.6).  
Chart 4.6 Interest rate spread, Q1 2015 -Q2 2021  
 
Source:  State Bank of Pakistan. Viewed at: https://www.sbp.org.pk/ecodata/index2.asp . 
4.168.   Monetary easing (Section 1.2.3) also impacted interest earnings, which  increased by 3.9% 
in 2020 as compared to a robust rise of 60.6% in 2019. This growth in earnings was mainly attributed 
to growth in banks' investment in government securities, and particularly in relatively longer -term 
government securities.  Net interest income (NII) posted a healthy growth of 22.5% in 2020, which 
led to increase in net interest margin (NIM) to 4.3% in 2020 from 4.0% in 2019.  
4.169.   However, the credit risk of the banking sector increased. The non -performing loan (NPL) to 
total loans ratio went u p from 8.6% at the end of 2019 to 9.2% at the end of 2020. More than a 
50% rise in NPLs during 2020 was observed in the agri -business, energy, and sugar sectors.71 
According to t he authorities, these NPLs were adequately provisioned, with provisioning cove rage 
ratio of 88.3%; the net NPLs to net loans ratio stayed at 1.2% by end -December 2020, indicating 
muted risk to the solvency from delinquent loan portfolio.72 
4.170.   The liquidity buffers of the banking sector improved in 2020 as a result of large investments 
in government securities. The liquid assets to total assets ratio went up from 49.7% in 2019 to 
54.8% in 2020, and the liquid assets to total deposits ratio increased from 68.4% to 74.3% during 
the same period. The Basel III liquidity ratio inc luding liquidity coverage ratio (LCR) and net stable 
funding ratio (NFSR) remained well above the required level in 2020. LCR improved to 226% (up 
from 180% in 2019), while NFSR increased to 177% (up from 159%). Banks are required to keep 
these ratios at l east at 100%.73 
4.171.   Islamic banking institutions (IBIs) maintained their growth momentum in 2020. Total assets 
grew by 30%; growth in deposits provided funding to support the expansion in financing and 
investment.74 The authorities indicate that the share of I BIs in the financial sector's assets went up 
from 14.9% in 2019 to 17.0% in 2020.  
 
71 State Bank of Pakistan (2021),  Financial Stability Review 2020 . 
72 State Bank of Pakistan, Financial Soundness Indicators . Viewed at: 
https://www.sbp.org.pk/ecodata/fsi.asp . 
73 State Bank of Pakistan (2021),  Financial Stability Review 2020 . 
74 State Bank of Pakistan (2021),  Financial Stability Review 2020.  
0%2%4%6%8%10%12%14%16%
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2
2015 2016 2017 2018 2019 2020 2021Weighted average lending rate
Weighted average deposit rate
Interest spread
Source:   State Bank of Pakistan.   Viewed at: https://www.sbp.org.pk/ecodata/index2.asp.Chart 4.[PAK]   Interest rate spread, Q1 2015 to Q2 2021WT/TPR/S/424 • Pakistan  
 
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  4.5.3.2   MFBs, DFIs, and NBFIs  
4.172.   In 2020, assets of the 11 MFBs and 9 DFIs grew by 30% and 16.5%, respectively.75 The 
assets of NBFIs grew by 27% in 2020 (up from 13.0% in 2019).  
4.173.   MFBs a ccount for 1.5% of the financial sector's assets (Chart 4.7). They provide banking 
services to low -income individuals or groups who are typically underserved by the traditional banking 
sector . The authorities state that MFBs play a significant role in prom oting financial inclusion, as 
they hold a network of branchless banking accounts and outlets (agents) that provide basic financial 
services to the general public in every corner of the country.  DFIs, accounting for 1.3% of the 
financial sector's assets, ar e financial institutions that provide risk capital for economic development 
projects on a non -commercial basis.  
Chart 4.7 Financial sector assets, 2020  
 
Source:  State Bank of Pakistan (2021), Financial Stabil ity Review 2020 . 
4.174.   The CDNS reflects the Government's efforts to improve financial inclusion. Currently, about 
80% of Pakistanis do not have a financial account, with 28% more men holding accounts than 
women.76 The authorities state that 62% of the adult pop ulation has a bank account, while 17% of 
adult women have a bank account. To increase people's access to affordable financial products and 
services, the SBP in collaboration with the World Bank developed the NFIS in 2015. Digitization of 
the CDNS was one o f the key items under the NFIS to improve access to financial services by 
expanding digital access points. Currently, the CDNS has 8.3 million registrations and 3.2 million 
investors (individuals). Among the 3.2 million investors, 1.4 million (44%) are wom en. Further, the 
CDNS is being expanded through the implementation of the Financial Inclusion and Infrastructure 
Project, which promotes digital transaction accounts and branchless banking. The CDNS is also 
engaged in its Alternative Delivery Channel proje ct to launch its ATM debit card and integrate its 
system into the micro payment gateway (Raast) of the SBP.  
4.5.3.3   Insurance  
4.175.   Insurance companies are regulated by the SECP, in accordance with, inter alia , the Insurance 
Ordinance 2000, the Insurance Rules 2017, the  Takaful Rules 2012, the Insurance Companies 
(Sound and Prudent Management) Regulations 2012, and the Securities and Exchange Commission 
(Microinsurance Rules) 2014. The authorities state that a draft Insurance Ordinance 2020 and a 
draft Insurance Accounti ng Regulation 2017 are under preparation. In addition, two SROs were 
issued in 2016 (on the Code of Corporate Governance for Insurers, and on the Amendments in 
Insurance Companies). Other relevant legislation includes the Credit and Suretyship (Conduct of 
Business) Rules 2018, the Small Dispute Resolution Committees (Constitution and Procedure) Rules 
 
75 State Bank of Pakistan (2021),  Financial Stability Review 2020.  
76 World Bank (2018), Digitized National Savings Provides Financial Inclusion for More Paki stanis , 
16 November. Viewed at: https://www.worldbank.org/en/news/feature/2018/11/15/digitized -national -savings -
provides-financial -inclusion -more-pakistanis .  
CDNS
12.7%
Insurance
5.5%
NBFIs
5.0%
MFBs
1.5%DFIs
1.3%Banks
74.0%Chart 4.[PAK]  Financial sector assets, 2020
Source: State Bank of Pakistan (2021), Financial Stability Review 2020.Central directorate of National Savings
Non-bank financial institutions
Development finance institutions
Microfinance banks   CDNS:
NBFIs: 
DFIs:
MFBs:  WT/TPR/S/424 • Pakistan  
 
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  2015, the General Takaful Accounting Regulations 2019, the Corporate Insurance Agents 
Regulations 2020, and the Third -Party Administrators for Health Insurance  Regulations 2014.  
4.176.   By 10  March  2021, there were 39 non -life insurers including 3 dedicated Takaful operators. 
Among them, three are owned by the Government (or local governments): the National Insurance 
Company Limited (100% owned by the Government), the Sindh Insurance Limited (wholly owned 
by the Government of Sindh), and the Alpha Insurance Company Limited (95% owned by the State 
Life Insurance Corporation).77 Among the 10 life insurers (including 2 family Takaful operators), 
there are 2 SOEs: the State Life Insurance Corporation of Pakistan, and the Postal Life Insurance 
Company Limited .78 The Pakistan Reinsurance Company Limited (PakRe), 44.8% owned by the St ate 
and 24.41% owned by the State Life Insurance Corporation , is the only reinsurer.  
4.177.   Despite having a sufficient number of players, both life and non -life insurance sectors are 
concentrated. In 2020, the State Life Insurance Corporation accounted for 74.9% and 55.0% of total 
assets and gross premiums of the life insurance sector, respectively. The top three life insurers form 
95.7% and 88.6% of total assets and gross premiums of the sector, respectively.79 The top three 
non-life insurers hold about hal f of total assets of the non -life sector, and contributed half of its total 
net premiums in 2020. The top five non -life insurers hold 70.3% of total assets and contribute 61.2% 
of total net premiums. According to data provided by the SECP, by the end of 20 19, the National 
Insurance Company Limited accounted for 18% of the non -life sector's total assets and 8% of gross 
premiums.  
4.178.   The National Insurance Company Limited has the exclusive authority to underwrite and 
insure public sector firms, assets, and proper ties. The Government has discretion to grant 
exemptions to this requirement. The authorities state that insurers operating in Pakistan must 
reinsure with PakRe  not less than 35% of their business, while the right of first refusal entitlement 
of PakRe remai ns in force.  
4.179.   Insurance penetration, measured by the gross premium to GDP ratio, was low, at 0.8% in 
2020.80 This sector has been developing quickly, and in 2020 total assets expanded by 13%.  
4.180.   Gross premiums for the life insurance sector increased by 2.9% in  2020, thanks to growth 
in group premiums, which reflected expansions carried out by the public life insurer in the National 
Health Insurance Program and Khyber Pakhtunkhwa's Sehat Sahulat Program.81 The sale of new 
individual life policies declined due to  the imposition of the lockdown, as distribution channels were 
unable to reach out to clients. For example, bancassurance was affected due to limited banking 
activities.  
4.181.   Net premiums for the non -life sector declined by a small margin in 2020, mainly driven  by a 
decline in motor insurance premiums, reflecting the lockdown measures and the slowdown in 
economic activity and thus a slowdown in the production, sale, and import of vehicles. The economic 
slowdown also reduced demand for marine, aviation, and trans port insurance. Health premiums 
went up by 2.6%, reflecting, inter alia , concerns about the medical cost implications of the COVID -19 
pandemic. Fire and property premiums increased by 15.9% in 2020, and the number of fire and 
property claims shot up by 102 %, due partly to the damage caused by rains and floods in Karachi 
and other areas in August 2020. Taken as a whole, the non -life sector has presented a relatively 
stable performance.  
4.182.   Under Rule 11 of the Insurance Rules 2017, MCRs  (minimum capital requirem ents) are 
PKR 500 million for non -life and PKR  700 million for life insurers. Foreign life and non -life insurance 
firms must be locally incorporated. According to Section 5 of the Insurance Ordinance 2000, the 
rights of those foreign insurance companies th at had established in Pakistan as branches before the 
 
77 SECP, List of Insurers as on March 10, 2021 . Viewed at: https://www.se cp.gov.pk/document/list -of-
insurers -updated -as-on-march -10-2021/?wpdmdl=41902&refresh=618c4382816251636582274 . 
78 State Bank of Pakistan (2021),  Financial Stability Review 2020.  
79 State Bank of Pakistan (2021),  Financial Stability Review 2020.  
80 The world a verage insurance penetration rate was 7.3% in 2020. Viewed at: 
https://www.statista.com/statistics/381174/insurance -penetration -in-selected -countries -worldwide/ .  
81 State Bank of Pakistan (2021),  Financial Stability Review 2020.  WT/TPR/S/424 • Pakistan  
 
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  entry into force of the Ordinance (in 2000) were grandfathered. After the entry into force of the 
Ordinance, foreign companies may only establish in Pakistan as a subsidiary.  
4.183.   Among the 39 non -life insur ers, 1 is a wholly owned subsidiary of a foreign firm. Its market 
share (in terms of assets) is less than 1% of the non -life sector. Another three non -life insurers have 
foreign shareholdings, and one of them has shareholdings from an international develop ment 
agency. In the life insurance subsector, one insurer is the subsidiary of the same international 
development agency, while another family Takaful company has significant foreign shareholding.  
4.184.   Life and non -life insurers are now allowed to be any bank's  subsidiaries. Section 23 of 
Banking Companies Ordinance 1962  restricts banks from holding more than 30% of shares in an 
insurance company.82 Six banks hold shares between 9% and 30% in non -life insurance companies.  
4.5.3.4   Capital markets  
4.185.   Capital markets in Pakis tan have witnessed several developments since 2015. First, the 
Securities Act 2015 was promulgated and replaced the Securities and Exchange Ordinance 1969. 
The new law contains provisions on, inter alia, investor protection, prevention of market abuse and 
manipulation, and promotion of public confidence including full disclosure requirements at the time 
of the initial offering and continuous disclosure requirements.  
4.186.   Following this, on 11  January  2016, the three local stock exchanges (i.e. Karachi Stock 
Exchange (KSE), the Islamabad Stock Exchange (ISE), and the Lahore Stock Exchange (LSE)) were 
merged into a single unified national stock exchange – the Pakistan Stock Exchange (PSX). Both the 
SECP and the Competition Commission of Pakistan (CCP) approved the integration, with a view to 
helping reduce market fragmentation, enhancing operating efficiency of capital markets, and 
providing investors a single and deep liquidity pool that is a fully integrated national trading 
platform.83 
4.187.   Currently, the capital mark et is regulated under the SECP, the PSX, Pakistan Mercantile 
Limited (PMEX) , the Central Depository Company (CDC) (Pakistan's sole central securities 
depository) , and the National Clearing Company of Pakistan Limited (NCCPL) . In 2016, the Futures 
Market Act was promulgated. Before that, in 2007, the PMEX, Pakistan's multi -commodity futures 
exchange, commenced operation. This exchange offers a diverse range of international commodities 
and financial futures, including gold, silver, crude oil, cotton , wheat, and currency pairs, as well as 
local agricultural products including rice, maize, and spices . During the period from 7  July 2020 to 
30 June 2021, 3.72 million lots of various commodities futures contracts, including gold, crude oil, 
US equity indi ces, and FX pairs, worth PKR 2.84 trillion, were traded on the PMEX.  
4.188.   The SBP states that Pakistan's capital market remains rather shallow and significantly lacks 
width and depth. Thus companies rely more on indirect sources of financing, such as banks or t heir 
internal sources (profit plough backs, etc.), and less on capital market for their funding needs.84 
4.189.   Nonetheless, the capital market's performance was remarkable in 2020/21. From July 2020 
to June 2021, the benchmark KSE -100 index improved from 34,889. 41 points to 47,356.02  points 
(up by 35.7%). As at 30  June 2021, there were 532 companies listed, with total market capitalization 
of PKR  8,297 billion. Furthermore, from July 2020 to June 2021, eight initial public offerings (IPOs) 
took place on the PSX.  
4.5.4   Communications and postal services  
4.5.4.1   Telecommunications  
4.190.   Growth momentum in the telecom sector has continued, and teledensity reached 86% by 
the end of August 2021 (Table 4.20). The mobile subsector has been the main contributor towards 
 
82 It states that "no banking company shall hold shares in any company whether as pledgee, mortgagee 
or absolute owner, of an amount exceeding 30% of the paid -up capital of that company or 30% of its own paid 
up share capital and reserves, whichever is less".  
83 Finance Division, Pakistan Economic Survey 2015 -16 – Capital Markets . Viewed at: 
http://www.finance.gov.pk/survey/chapters_16/06_Capital_Markets.pdf .  
84 State Bank of Pakistan (2021),  Financial Stability Review 2020.  WT/TPR/S/424 • Pakistan  
 
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  overall growth in tele density. It has been expanding both in terms of networks and of the provision 
of broadband services. By the end of 2020, 98% of urban households have a mobile phone and 
about 46% individuals own them. Cellular mobile subscribers (number of active SIMs) rea ched 
186 million at the end of August 2021, up by 10.6% from the end of June 2020. The number of 
fixed-line subscriptions is in general declining. The telecommunications sector is another major 
recipient of foreign investment (apart from financial services , Section 4.5.3), accounting for 8% of 
FDI inflows in 2020 -21, down from 24% in 2019 -20 (Table 1.5).  
Table 4.20 Basic indicators, 2015/16 –August 2021  
  2015/16  2016/17  2017/18  2018/19  2019/20  August 2021  
Total teledensity (%)  70.8 72.4 73.6 77.8 78.6 86.2 
Cellular subscribers  133,901,694  140,478,555  151,519,813  162,278,408  168,559,815  185,565,387  
Fixed -line 
subscribers  3,397,804  3,010,655  2,898,719  2,649,411  2,493,244  .. 
Broadband 
subscribers  32,308,159  44,622,653  58,692,690  71,551,730  83,858,747  105,994,351  
.. Not available.  
Source:  Pakistan Telecommunication Authority. Viewed at: http://www.pta.gov.pk . 
4.191.   The Ministry of Information Technology and Telecommu nications (MOITT) plans, coordinates, 
and directs efforts to initiate and launch information technology and telecommunications 
programmes and projects.85 The statutory independent Pakistan Telecommunication Authority (PTA) 
regulates the sector. The main le gislation regulating the sector is the Pakistan Telecommunication 
(Re-Organization) Act of 1996, amended most recently in 2014.  
4.192.   There is no foreign equity requirement, and 100% foreign equity is allowed in all 
telecommunications services.  
4.193.   The mobile sector  is very competitive with four operators.86 Among them, three are foreign -
owned ( Jazz, Telenor, and Zong). Jazz has a market share of 38.1%, followed by Telenor (26.7%), 
Zong (22.1%), and Ufone (12.3%). The fixed sector has one major transnational operator – Pakistan 
Telecommunication Company Limited (PTCL) – providing long -distance, international, and access 
services. PTCL is majority owned by the Government (62%). Many smaller licensees also provide 
broadband, long -distance, or regio nal access.  
4.194.   In 2015, the MOITT issued the National Telecommunications Policy 2015, with a view to 
transforming Pakistan into an information society and a knowledge -based, middle -income country 
by 2025.87 
4.195.   Under the Policy, the MOITT is to develop sector -specific Competition Rules, as required 
under both the Telecom Act and in conformance with the Competition Act 2010. The Rules should 
be introduced within six months from the issuance of the Policy. The authorities indicate that the 
draft C ompetition Rules we re submitted to the MOITT for consideration. They will govern all 
competition -related matters of the telecommunications sector. These Rules will provide processes 
for market review, including identifying product markets, determining the respective market p ower 
of service providers within each market, and determining whether anti -competitive behaviour is 
prevalent and what remedies should be applied as ex ante  or ex post  measures.  
4.196.   The current licensing regime continues to apply, while a separate category in the class 
licensing regime associated with satellite services is to be introduced. The authorities state that this 
licensing regime is to be reflected in the upcoming National Broadband Policy, which is under 
consultation . The Government also considers tha t there is a need to further enhance and optimize 
the licensing regime to cater for new technological and market trends.88 
 
85 Ministry of Information Technology and Telecommunication. Viewed at: https://moitt.gov.pk/ .  
86 ITU (2021), Digital Trends in Asia and the Pacific, 2021. Viewed at: https://www.itu.int/dms_pub/itu -
d/opb/ind/D -IND-DIG_TRENDS_ASP.01 -2021-PDF-E.pdf. 
87 MOITT (2015), National Telecommunications Policy 2015. Viewed at: 
https://moitt.gov.pk/SiteImage/Misc/files/Telecommunications%20Policy%20 -2015%20APPROVED.pdf . 
88 MOITT (2015), National Telecommunications Policy 2015. Viewed at: 
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  4.197.   The licensing regime already distinguishes between operators providing infrastructure facility 
and telecommunications systems  and tho se providing services only. For fixed -line services, there 
are local loop (LL), long -distance and international (LDI), and infrastructure licences. A company 
can hold both LL and LDI licences, and PTCL guarantees licensees co -location rights. LDI licensees  
must build at least one point of interconnection in 5 of PTCL's regions within 1 year and in all 
14 regions within 3 years, and initially own at least 10% of its transmission facility (increasing to 
30% and 50% in the following two years, respectively), o r have negotiated a 5 -year infrastructure 
lease with any licensed operator mandated to provide such facility . A performance bond of 
USD 10 million is required  from an LDI licensee . LL licensees must operate one point of 
interconnection in each PTCL region they operate within a prescribed time. Fees are USD  10,000 for 
LL licences per telecom region  and USD  500,000 for LDI licences; in subsequent years, all licensees 
pay an annual fe e of 0.5% of the previous year's gross revenue  to the PTA, 1.5% to the Universal 
Service Fund (USF), and 0.5% to the R&D Fund , less inter -operator and PTA/Frequency Allocation 
Board (FAB) payments (see below).  
4.198.   For mobile services, licences/ spectrum  are auc tioned. Licensees pay an annual fee to the 
PTA of 0.5%, the USF 1.5%, and the R&D Fund 0.5%  of the previous year's gross revenue , less 
inter-operator and PTA/FAB payments.  
4.199.   Criteria for issuing a licence include economic viability, contribution to universal  service 
goals, and other social or economic development objectives.  Licensees were required to register with 
the SECP.  
4.200.   The obligation on licensees to interconnect for the origination and termination of telephony 
traffic remains, so that calls may be estab lished between any two numbers in Pakistan and/or 
between international calls originated and terminated within/outside Pakistan.89 For licensees 
designated as having significant market power (SMP) in the relevant market, their interconnection 
terms are det ermined  by the PTA using a cost orientation /benchmarking  approach. Termination rates 
and schedules of charges are reviewed every three years or earlier, depending on market conditions.  
4.201.   Under the Telecommunication Rules 2000 and Interconnection Guidelines 2 004, the PTA 
determines the upper ceiling of termination rates for both SMP and non -SMP operators. Operators 
are free to offer lower termination rates on a mutually agreed and non -discriminatory basis.  The 
authorities indicate that since 2015, only one int erconnect dispute has been reported to the PTA 
under Interconnection Dispute Resolution Regulations 2004 (amended in 2010).  
4.202.   Radio frequency spectrum became one of the most critical scarce resources in the telecom 
sector. The Government aims to manage spect rum with a view to allocating and assigning spectrum 
to maximize social and economic benefits.90 Thus, the Government prepares spectrum strategies 
annually, based on the following principles. First, spectrum is to be released in a timely manner to 
meet the  requirements of new and existing services, to avoid any constraint on usage or degradation 
of quality of service due to lack of spectrum. Second, it is re -farmed where its current use is not in 
the best social and economic interests, underutilized, or use d inefficiently, or its use is inconsistent 
with international allocations. It can be shared and traded.  
4.203.   Spectrum is assigned by the FAB, which was established under the Pakistan 
Telecommunication (Re -organization) Act 1996. The FAB has the authority to as sign and allocate 
portions of the radio frequency spectrum to the Government, providers of telecommunications 
services and systems, radio and television broadcasting operations, public and private wireless 
operators, and others. According to the National T elecommunications Policy, spectrum will be 
assigned in a manner that recognizes the value of spectrum to the prospective licensee and to the 
economy as a whole, and in a manner that is consistent with the Spectrum Strategy. Where spectrum 
is licensed, a fe e is charged based on the most appropriate of the following methods : 
a. Auction: This is the preferred method, which assigns access rights to blocks of spectrum 
for dedicated use.  To the extent possible, these will be technology neutral and cover a 
minimum ti me-frame and quality of service obligations in the licence to maximize public 
 
89 MOITT (2015), National Telecommunications Policy 2015.  
90 MOITT (2015), National Telecommunications  Policy 2015.  WT/TPR/S/424 • Pakistan  
 
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  benefit. Where a band is to be shared between users and/or applications, blocks of 
spectrum will be created that reflect these joint uses.  
b. Administrative incentive pricing (AIP):  for congested spectrum that has not been subject 
to an auction, for example, microwave spectrum. It reflects the opportunity cost of 
spectrum to encourage its efficient use. AIP improves the efficient use of spectrum by 
setting the price for spectrum at a  level that encourages the user to consider 
alternatives and encourages spectrum use to move to the highest value application.  
c. Administrative cost recovery (ACR): applied when auctions and AIP are inappropriate, 
for example, in aeronautical, maritime, and amateur radio bands. The fee reflects the 
costs incurred in administering spectrum in the band from which frequency is to be 
assigned.91 This approach is applied to spectrum that is not congested and where the 
risk of interference is low.  
4.204.   Currently, spectr um fees are imposed to cover the FAB's annual budget. In November 2020, 
the MOITT issued the Rolling Spectrum Strategy 2020 -2023, which proposes various suggestions to 
the PTA and the FAB based on international best practices.92 It proposes that, inter alia, the current 
fee structure based on the Annual Spectrum Administrative Fee (ASAF) may continue until the time 
a market -based pricing formula for backhaul spectrum is in place. The ASAF is the administrative 
cost for managing access and backhaul spectrums used by mobile operators. Then the pricing may 
be decoupled, so that separate regimes are introduced for access spectrum, and for backhaul 
spectrum.  
4.205.   In 2021, less than 10% of mobile  towers in Pakistan had fibre connectivity for backhaul. 
Mobile network operators rely heavily on point -to-point microwave links, which, according to an ITU 
report, suffer from lower bandwidth.93 The same ITU report suggests that there is a need to rapidly  
increase fiberization all over the country.  
4.206.   To provide telecommunications services to underserved and unserved areas, a USF was 
established in 2006. Managed by the MOITT, the USF also promotes broadband penetration and tries 
to enhance the provision of e -services. It is financed by contributions to a maximum of 1.5% of a 
licensee's gross revenue minus inter -operator payments and PTA - or FAB -mandated payments. 
Provision of USF services is auctioned among licensed operators, and awarded to the firm bidding 
(requiring) the lowest subsidy, which will be allowed to earn a "reasonable" return.  
4.207.   In addition, a Research and Development Fund (R&D Fund) finances research in development 
in priority areas of information and communications technology. R&D Fund contributi on is at 0.5% 
of a licensee's gross revenue minus inter -operator and related PTA/FAB -mandated payments.  
4.208.   Pakistan is linked to the world through six undersea cables, managed by the PTCL and  
Transworld Associates. A licensee, Cyber Internet Services (Pvt.) L td plans to install one more 
undersea cable, part of the Pakistan and East Africa Connecting Europe (PEACE) network, to connect 
Pakistan with East Africa and Europe. The PTCL also plans to lay a submarine cable called AFRICA -1, 
which will connect Pakistan with the Middle East (United Arab Emirates), Africa (Kenya, Djibouti, and 
Egypt), and Europe (Italy and France).  
4.209.   The PTA accepts all international telecom equipment standards including ITU -T, ETSI, EN, 
and FCC. It also accepts the test reports confirming conformity with approved standards of these 
bodies.  
4.5.4.2   Broadcasting and audiovisual services  
4.210.   The Pakistan Electronic Media Regulatory Authority (PEMRA) regulates broadcasting and 
audiovisual services and licenses radio and television operators. PEMRA has promulgated a number 
of regulations dealing with various services such as televisions, FM radio, and distribution serv ices. 
New licensing regimes and regulations have been introduced since 2015, including regulations for 
 
91 MOITT (2015), National Telecommunications Policy 2015.  
92 MOITT (2021), Rolling Spectrum Strategy 2020 – 2023. Viewed at: 
https://moi tt.gov.pk/SiteImage/Misc/files/PakistanRollingSpectrumStrategyFinal23Nov2020.pdf .  
93 ITU (2021), Digital Trends in Asia and the Pacific, 2021.  WT/TPR/S/424 • Pakistan  
 
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  Direct to Home (DTH) services, landing rights permissions, and a Television Audience Measurement 
(TAM) or Television Rating Points (TRP) service. Moreove r, a licensing/registration regime and 
regulations for regulating Web TV and OTT (Over the Top) Content services are in progress. A 
licensee must be a citizen or resident of Pakistan, or a locally incorporated company. Majority 
shareholding and management control shall vest in Pakistani nationals.  
4.211.   Three public sector/national broadcasters, the Pakistan Broadcasting Corporation (PBC), the 
Pakistan Television Corporation (PTVC), and Shalimar Recording & Broadcasting Company (SRBS), 
are outside PEMRA's authori ty under Section 37 of the PERMA Act 2007.  
4.212.   PEMRA has also taken a number of steps including relaxation of taxes and reducing import 
tariffs of broadcasting equipment to facilitate the participation of international broadcasters in the 
Pakistani market and the distribution of international satellite TV channels. Since its inception, 
PEMRA has issued 120 satellite TV licences, 4,062 cable TV licences, and 257 commercial and 
non-commercial FM  radio licences. It also issued 42 landing rights permissions to fore ign satellite 
TV channels such as BBC, CNN, Cartoon Network, Discovery, and Animal Planet. PEMRA had been 
working on emerging technologies and has so far issued Mobile TV (video and audio content 
provision) Service Licenses; Internet Protocol TV (IPTV) Lic enses; and Direct to Home (DTH) 
Licenses.94 
4.5.4.3   Postal services95 
4.213.   According to the Post Office Act of 1898, Pakistan Post is the exclusive prerogative of the 
Federal Government to collect, transmit, and deliver letters (including postcards) by post. The 
state-owned Pakistan Post, under the Ministry of Communications, exclusively provides the following 
postal services to about 20 million households and businesses as a community service, without any 
cost considerations, through a network of around 13,000  post off ices: 
a. universal postal service throughout the country, in both urban and rural areas;  
b. postal financial services;  
c. money transfer services throughout the country; and  
d. inbound Western Union money transfer service from abroad.  
4.214.   Pakistan Post also performs funct ions on behalf of federal and provincial governments, which 
include a savings bank, postal life insurance, collection of taxes, and collection of electricity, water, 
gas, and telephone bills.  
4.215.   Universal postal service includes the home collection and delive ry of letters and parcels 
throughout the country at affordable rates:  
a. letter -post items up to 2  kg; 
b. books, newspapers, and periodicals;  
c. parcels up to 50  kg; 
d. supplementary services (registered, insured, recorded, and express services);  
e. pension payment and p ublic utilities; and  
f. money orders.  
4.216.   The approval of the Federal Government is required for Pakistan Post to set domestic postal 
tariffs. Some rates are set below cost for social reasons. Pakistan  Post is required to balance its 
 
94 PEMRA Annual Reports, various issues . 
95 UPU, Status and Structure of Postal Entities, Pakistan . Viewed at: 
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  revenue and expenditure and, if possible, make some profit. Any profits are paid to the State 
Treasury, while the Government subsidizes services in the event of any deficit. The authorities state 
that Pakistan Post has been incurring loss in recent years due to employee - and pension -related 
expenses. Nonetheless, according to the authorities, Pakistan Post has not been in receipt of any 
subsidies in these years.  
4.217.   Courier companies, like other companies, are registered with the SECP. Around 23 private 
courier companies currently operate in Pakistan, including foreign companies such as DHL and 
FedEx. There is currently no legislative framework regulating the operation and management of 
courier companies. The authorities note that the National Freight and Logistics Policy, approved in 
March  2021 by the ECC, is to regulate the courier services sector.  
4.5.5   Transport services  
4.218.   Development of the transport sector has been unbalanced, and there is a lack of a coherent 
institutional framework and up -to-date legislation.96 Against this backdrop, in 2017, the Government 
issued its National Transport Plan 2018, with a view to providing a guide to the overall development 
of the transport sector.  
4.219.   Land transport is the dominant mode of transport within Pakistan. The Government h as been 
investing in the transport sector through the China -Pakistan Economic Corridor (CPEC) programme 
that, with its roads and railways network, aims to integrate Pakistan with all regional neighbours 
and generate much -needed economic activity. In additi on, the Central Asia Regional Economic 
Cooperation (CAREC) programme also aims to promote the development of the transport sector.  
4.220.   Cabotage in air, land, and maritime transport is prohibited.  
4.5.5.1   Road transport  
4.221.   Road transport is the backbone of Pakistan's transport system. The road network carries 
over 97% of inland freight (96% in 2015) and 94% of passenger traffic (92% in 2015).  
4.222.   The Ministry of Communications is in charge of formulating policies for road transportation. 
The National Highway Aut hority (NHA) implements the policies with regard to infrastructure, while 
the National Highway and Motorway Police takes care of safety regulations.  
4.223.   The NHA is committed to providing a safe, modern, and efficient transportation system. 
Currently, the NHA n etwork comprises 39 national highways, motorways, expressways, and strategic 
roads, with a total length of 12,131  km.97 Pakistan is bisected by the Indus river. The eastern part 
of Pakistan is historically well developed. The NHA is improving east -west con nectivity through 
transport infrastructure in the western part, by, inter alia, building numerous bridges across the 
river.98 
4.224.   NLC, a state -owned multimodal logistics company, has the exclusive right to collect street 
tolls. It also operates a network of dr y ports and warehousing facilities in major commercial hubs 
and gateway towns.  
4.225.   Private investment may participate in road construction, through build -transfer -operate 
(BTO) contracts and public -private partnership (PPP) projects.  
4.5.5.2   Railway transport  
4.226.   Pakistan  Railways, a department under the Ministry of Railways, is the sole operator 
providing rail services and managing the railway infrastructure. Pakistan has a railway network of 
7,791 kilometres, served by 466 locomotives (461 diesel engines and 5 steam engi nes). 
 
96 Ministry of Planning, Development and Reform (2018), National Tran sport Policy of Pakistan 2018 . 
Viewed at: https://www.pc.gov.pk/uploads/downloads/policy.pdf . 
97 Finance Division (2021), Pakistan Economic Survey 2020 -21. 
98 Finance Division (2021), Pakistan Economic Survey 2020 -21. WT/TPR/S/424 • Pakistan  
 
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  4.227.   Rail has a 2% market share of the freight market, and 5% of the passenger market. 
According to the National Transport Policy, this was primarily due to underinvestment in 
infrastructure, operations, and human capital.99 During the period from July 20 20 to February 2021, 
18 million passengers were transported by railways, a drop by 54% from the same period in the 
previous year. Transportation of freight declined slightly, by 0.9%, while gross earnings declined by 
16%.100 
4.228.   The authorities indicate that th e Railway Board stipulates the maximum and minimum rates 
for rail fares. The Railway Administration can charge neither above nor below these maximums and 
minimums. In case of any change, prior approval from the Ministry of Railways is required.  
4.5.5.3   Maritime an d inland water transport  
4.229.   Pakistan has a coastline of around 1,080 kilometres. About 90% of Pakistan's international 
trade is transported by sea.  
4.230.   The maritime sector is regulated mainly under Merchant Shipping Ordinance 2001 and 
Pakistan Merchant Marine Pol icy 2001. Other relevant legislation includes the Merchant Shipping 
(Medical Examination) Rules 2021, the Merchant Shipping (Pilot Ladder) Rules 2020, and the 
Merchant Shipping (Safe Manning of Work and Watch -keeping) Rules 2021.101 
4.231.   The Ministry of Maritime  Affairs regulates the maritime sector. In 2019, a Shipping Policy 
was issued, with a view to incentivizing the private sector to participate in the mercantile shipping 
business. Under the policy, shipping companies incorporated in Pakistan and that regist ered their 
vessels with a Pakistan flag are entitled to income and sales tax exemption until 2030. In addition, 
national flag carriers acquire first berthing rights at Pakistani ports.102 The authorities state that 
there is no flag of convenience registry i n Pakistan, and all vessels registered in Pakistan fly the 
Pakistani flag. Currently, purchase and import of Pakistani -flagged vessels are exempt from income 
tax and import duties till 2030; however, sales tax is imposed on the procurement of such vessels 
from 1  July 2021. Pakistani -flagged vessels have been able to transport cargo from Indian ports or 
third-party cargoes destined for India on the basis of Protocol on Shipping Services signed between 
Pakistan and India on 14  December  2006.  
4.232.   Foreign ships dom inate international shipping in Pakistan, with no restrictions applying to 
foreign carriers operating from or into Pakistani ports.103 
4.233.   Pakistan National Shipping Corporation (PNSC ), an SOE, has a fleet of 11 ships with a total 
carrying capacity of 831,711 deadweight tonnage: 5 bulk carriers, 4 Aframax tankers (oil tankers), 
and 2 LR -1 product tankers.104 PNSC has a first right of refusal in transporting government or public 
sector c argo and petroleum products imported by Pakistan State Oil (PSO). However, according to 
the authorities, PNSC does not have a monopoly in transporting these products, as several public 
sector organizations do not allocate PNSC their cargoes under its first  right of refusal. The authorities 
state that contracts of transportation of crude oil between PNSC and oil refineries is based on a 
market and commercial bas es. Approximately 70% to 80% of total imports of crude oil in the country 
are undertaken by PNSC.  
4.234.   Pakistan's three maritime ports – Karachi, Gwadar, and Qasim – are connected to a total of 
17 dry ports around the country. Port Qasim has a liquid cargo terminal, with an annual handling 
capacity of over 4 million tonnes; a grain and fertilizer terminal, with an annual capacity of over 
4 million  tonnes; two container terminals, with an annual capacity of 20.4  million tonnes each; and 
two LNG floating terminals, with an annual capacity of 4.5  million tonnes each.105 Karachi Port is one 
 
99 Ministry of Planning, Development and Reform (2018), National Transport Policy of Pakistan 2018 . 
100 Finance Division (2021), Pakistan Economic Survey 2020 -21. 
101 Ministry of Maritime Affairs, Acts/Ordinances & Rules . Viewed at: 
https://www.moma.gov.pk/Detail/Mzg0M2I4NzctMjE1ZS00ZGM0LTkyNmItMDViODFhZjE4Njhk .  
102 Ministry of Maritime Affaire, Pakistan Merch ant Marine Shipping Policy 2019. Viewed at: 
https://moma.gov.pk/ProjectDetail/ZDZjYzY3ZDAtZTQ2OS00NGRhLTliNmItMzJmMzdiYTY3ZDE0 .  
103 The authorities note that foreign vessel operations cannot be restricted as that would go against 
international norms and treaties, which may result in similar actions against Pakistan -flagged vessels .  
104 PNSC, Company Profile. Viewed at: https://pnsc.com.pk/about -us.html .  
105 There are also coal, clinker, and cement terminals; oil terminals; chemical and LPG terminals; and 
iron ore and coal berth, marginal wharf berths.  WT/TPR/S/424 • Pakistan  
 
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  of South Asia's larges t deep -water seaports, handling around 60% of Pakistan's merchandise trade . 
Gwadar Port, a newly developed deep -water seaport and one of the deepest natural sea ports in the 
world, became operational in 2008, while regular shipping lines started to call on  Gwadar in 
March  2018. 
4.235.   South Asia Pakistan Terminal Limited – a part of Karachi Port Trust (KPT) – with a draught 
of 16  metres is considered one of South Asia's deepest seaports. KPT handles around 50% of 
Pakistan's port cargo.  
4.236.   All ports are state -owned. The Port of Karachi is operated by the KPT and the Port of Qasim 
by the Port Qasim Authority (PQA). The Port of Gwadar, based on a BOT model, is managed by the 
Chinese Overseas Port Holdings Company Ltd (COPHCL). The Gwadar Port Authority started 
developing the first free zone of Pakistan in collaboration with COPHCL. Work on Phase I, the 
southern part of the free zone, is near completion. Once completed, the Government is to provide 
tax incentives to enterprises operating in the zone. COSCO liner ships have called regularly at the 
port since March 2018.  
4.237.   For the operation or construction of terminals, private firms are offered concessions on a 
BOT (build -own-transfer) or public/private joint venture basis. Certain port services, in cluding pilot 
and tug services, are reserved for the public sector. For example, at Karachi and Qasim, p iloting and 
tugging services are provided by KPT and PQA, respectively, whereas at Gwadar, these services are 
provided by COPHCL.  
4.238.   While infrastructure a nd operations at the seaports are generally satisfactory or are being 
improved, poor hinterland connectivity causes long delays.106 The authorities state that good 
hinterland connectivity is available at the Port of Karachi through road and railways, wherea s the 
Port of Gwadar is envisaged as a transhipment port, not a hinterland port.  
4.5.5.4   Air transport  
4.239.   The Civil Aviation Authority (CAA) under the Cabinet of the Prime Minister is responsible for 
licensing air service suppliers and maintaining safety. It issued t he National Aviation Policy 2019, 
aiming to improve the competitiveness of the industry and enhance regional air connectivity.107 
During the period 2015 -19, aircraft movements grew on an average by 7.1% and passenger traffic 
by 6.3% annually.108 Pakistan's a ir transport grew until 2018 (Table 4.21). Thus, the National 
Aviation Policy aims to achieve sustainable growth and align the aviation sector with the International 
Civil Aviation Organization's (ICAO) strategic objectives related to, inter alia, safety, air navigation 
capacity and efficiency, security, passenger facilitation, economic development, licensing, 
maintenance and repair, and environmental protection.  
Table 4.21 Air traffic data, 2014 -21 
Year Passen ger traffic (number)  Cargo traffic (million tonnes)  
 Domestic  International  Total  Domestic  International  Total  
2014/15  6,352,758  11,724,202  18,076,960  38,663  232,955  271,619  
2015/16  6,965,318  13,845,060  20,810,378  37,547  312,054  349,601  
2016/17  7,182,009  14,839,766  22,021,775  66,903  253,794  320,697  
2017/18  7,317,569  15,609,713  22,927,282  76,238  249,240  325,478  
2018/19  6,019,953  13,973,322  19,993,275  37,449  270,084  307,533  
2019/20   4,218,523  9,584,098  13,802,621  25,289  177,559  202,847  
2020/21a 4,159,345  4,510,201  8,669,546  23,177  184,991  208,169  
a Provisional.  
Source:  Civil Aviation Authority. Viewed at: https://www.caapakistan.com.pk/AT/AT -EO-Stats.aspx . 
 
106 Ministry of Planning, Development and Reform (2018), National  Transport Policy of Pakistan 2018.  
107 CAA (2019), National Aviation Policy 2019 . Viewed at: 
https://www.caapakistan.com.pk/upload/AT/NAP -2019.pdf .  
108 CAA (2019), National Aviation Policy  2019.   WT/TPR/S/424 • Pakistan  
 
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  4.240.   Some private air carriers (Airblue, Shaheen Air, and Air Indus) operate in Pakistan, while the 
only national flag carrier – Pakistan International Airlines (PIA) – dominates the air transport market. 
PIA accounted for 52% of domestic passenger traffic, 37% of domestic cargo traffic (with mail) (55% 
and 73.5%, respectively, in 2013/14), and 34% of the international market for passengers in 2020. 
According to the National Transport Policy, PIA is facing seve ral challenges, including financial 
problems and an inability to compete.109 
4.241.   According to the Civil Aviation Rules 1994, domestic carriers (passenger and freight) must 
be controlled by Pakistani investors; foreign equity is capped at 49%.110 In accordance with the 
National Aviation Policy 2019, Pakistani -scheduled air carriers must offer a minimum of 5% of their 
total capacity in terms of "available seat kilometres (ASKs)" floated on domestic trunk routes to 
"primary routes", and to "socio -economic" routes.111 
4.242.   Take-off and landing slots are allocated on a first -come, first -served basis and are 
maintained historically.  
4.243.   Pakistan has concluded air services agreements (ASAs) with 98 partners (Table  A4.1).112 
Among them, the ones with Belarus, Bulgar ia, the State of Kuwait, Malta, Morocco, New  Zealand, 
Qatar, the Kingdom of Saudi  Arabia, Serbia, and United Arab Emirates were either signed or initialled 
after 2015. In terms of traffic rights, 5th freedom is granted in quite a few of the ASAs for which 
detailed information is available. By contrast, as is frequently the case for ASAs, none of Pakistan's 
ASAs include 7th freedom or cabotage rights. Most of the fully coded Agreements do not provide f or 
cooperation between airlines, and include the most stringent options in terms of withholding, pricing, 
and capacity clauses (i.e. Substantial Ownership and Effective Control, double approval and 
pre-determination, respectively). The majority of Pakistan 's fully coded ASAs also foresee an 
exchange of statistics. Regarding designation clauses, although single designation is by far the most 
common clause, a significant number of ASAs allow for the possibility of Parties to designate multiple 
airlines.  
4.244.   Passe nger chartered flights, including those operated by foreign airlines, are unrestricted on 
routes "not adequately covered" by scheduled airlines, but are not allowed where scheduled flights 
exist.  
4.245.   Pakistan has 27 civil airports with scheduled services on co mmercial airlines (26 in 2015). 
Islamabad International Airport began operation in May 2018. Terminal and related services are 
categorized into facilitation and commercial activities. The authorities state that commercial and 
semi-commercial activities are  outsourced either through open tenders or awarded directly based 
on the nature of such services. Airline operators may handle their own aircraft ground services or 
use services of other ground handling agencies licensed by the CAA. Foreign service provide rs may 
engage in such activities if they are registered with the SECP and obtain clearance from the Board 
of Investment (BOI) and related agencies. They must engage in such activities with local joint 
venture partners, and foreign shareholding must not exc eed 49%.  
4.246.   The Government imposes no obligation to use a specific computer reservation system (CRS) 
provider.  
4.247.   The air transport sector was first deregulated in 1992. Accordingly, all fares (other than on 
socio-economic routes) have also been deregulated sinc e then. For socio -economic routes, there 
shall be no landing and housing charges for scheduled services. In cases where a complaint from 
 
109 Ministry of Planning, Development and Reform (2018), National Transport Policy of Pakistan 2018.  
110 Rule 179(2) of Civil Aviation Rules 1994 states that "Foreign investment, if any, may be permitted to 
the extent where the controlling interest (majority shareholding) remains in local hands".  
111 Trunk routes refer to routes between any of the following c ities: Karachi, Lahore, Islamabad, 
Peshawar, and Quetta. Primary routes refer to air links with the following destinations: Faisalabad, Multan, 
Sialkot, Sukkur, D.G. Khan, Rahim Yar Khan, Bahawalpur, Nawabshah, D.I. Khan, and Hyderabad. 
Socio -economic rout es are grouped into Category A and Category B. Category A refers to routes with 
destinations as: Gwadar, Zhob, Mohenjo -Daro, Mirpur Khas, Muzaffarabad, Skardu, Gilgit, Chitral, Saidu Sharif, 
and Bannu. Category B refers to routes with destinations as: Turb at, Panjgur, Khuzdar, Dalbandin, Rawalakot, 
Parachinar, Sehwan Sharif, Ormara, Jiwani, Pasni, Jacobabad, Sibi, Mangla, Kohat, Bhagtanwala, Mianwali, and 
Talhar.  
112 CAA (2019), National Aviation Policy 2019 . WT/TPR/S/424 • Pakistan  
 
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  customers or evidence of collusion/cartelization or predatory pricing is received, the case is referred 
to the Competit ion Commission, which adjudicates matters pertaining to anti -competitive practices.  
4.5.6   Tourism  
4.248.   Tourism was affected severely by the COVID -19 pandemic. Other factors affecting the 
tourism subsector include security concerns and a lack of planning and policy di rections.  
4.249.   Tourism is regulated under provincial governments, while the Pakistan Tourism Development 
Corporation (PTDC) is responsible for promoting the tourism subsector at the federal level. Its 
activities include the operation of tourist information cent res and various bus transport services. In 
2020, the PTDC, together with other public and private sector stakeholders, prepared the National 
Tourism Strategy of Pakistan (2020 -2030), which envisions making Pakistan one of the preferred 
tourist destinations  by promoting tourism that is culturally conducive, economically viable, and 
environmentally sustainable. As part of the National Tourism Strategy, a 5 -Year National Tourist 
Strategy Action Plan (2020 -2025) was also prepared, providing a roadmap for effect ive 
implementation of the strategy.  
4.250.   In addition, a National Tourism Coordination Board (NTCB) was constituted in 2019, with 
representations from all provincial and regional tourism departments, relevant federal government 
ministries, tourism and hospitalit y-related associations, representatives of the private sector, and 
tourism experts. The PTDC was assigned to serve as the secretariat and the implementation body 
of the NTCB.113 
4.251.   The authorities state that s ince then, various efforts have been made, includin g easing of 
the visa policy, promoting religious tourism, setting up a tourism e -portal, developing a "tourism 
development endowment fund", improving coordination with tourism stakeholders, and launching 
Brand Pakistan. The authorities state that the e -visa system was introduced for the first time in 
Pakistan for over 190 countries and visa on arrival for 50 countries. Promotion activities on social 
media are being carried out vigorously. The authorities state that national minimum standards were 
developed for the tourism and hospitality sector. The Pakistan Tourism Development Endowment 
Fund (PTDEF) was created with seed money of PKR 1 billion. A governing body of  the PTDEF 
comprising public and private sector experts was established. The authorities indica te that the Fund 
is utilized to promote the tourism potential of Pakistan; aid the tourism sector in matters relating to 
hospitality services, standards and certificates, research and analysis, and the centralized tourism 
database; and encourage innovative  ideas and start -ups. 
4.5.7   Distribution services and e -commerce  
4.5.7.1   Distribution services  
4.252.   Distribution services (wholesale and retail trade) contributed to about 19% of GVA in 
2020/21 (Table 1.2). Its growth rate changed from being negative in 2019-20 to positive 8 .4% in 
2020/21, indicating a fast recovery of the sector.  
4.253.   According to the authorities, currently t he distribution sector is unregulated. However, the 
National Freight and Logistics Policy (NFLP), approved by the ECC on 10  March  2021, envisages 
actions to institutionalize some aspects of the regulatory framework of the distribution sector.  
4.254.   The authorities state that there are no restrictions on foreign investment to enter into the 
distribution sector, nor are there any restrictions on super stores.  
4.5.7.2   E-commer ce 
4.255.   Following the issuance of the Digital Pakistan Policy in 2018, the Government launched the 
E-Commerce Policy 2019.114 Under the Policy, e -commerce is defined as "buying and selling of goods 
 
113 PTDC, Pakistan Tourism News . Viewed at: 
https://tourism.gov.pk/publications/NEWSLETTER_PTDC.pdf .  
114 About 60% of Pakistan's population is between 15 and 29 years old. The country has more than 
300,000 English -speaking IT professionals, and each year more than 20,000 IT engineers graduate from 
universities. The Government thus launched its Digital Pakistan Policy in 2018 with a view to utilizing this WT/TPR/S/424 • Pakistan  
 
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  or services including digital products through electronic transa ctions conducted via the internet or 
other computer -mediated (online communication) networks".115 
4.256.   Although e -commerce is still at a nascent stage in the country with modest Internet retail 
sales, it has been developing quickly in the past few years in terms  of the number of online vendors 
and local e -commerce platforms. The authorities state that f or example,  from FY2016/17 to 
FY2019/20, the number of e -commerce merchants increased by 199% and e -commerce payments 
increased by 750% in volume and 271% in value . 
4.257.   With a view to increasing the competitiveness of local e -commerce players, and thus 
enhancing their share in local and global trade, the E -Commerce Policy was issued to lower the 
access threshold for enterprises to access the e -commerce market by ensuring consumer protection, 
availability of e -payments, and global connectivity of goods and services providers for cross -border 
trade. The Policy covers and provides guidelines on key components to promote e -commerce, 
including regulatory environment, f inancial inclusion and digitization through payment 
infrastructure, empowering youth and SMEs, consumer protection, taxation, ICT infrastructure, 
logistics, and engagement in multilateral negotiations. The SBP forecasted that Pakistan can increase 
its GDP by USD  36 billion and create four million jobs by 2025 via an increase in the use of digital 
financial services alone.116 
4.258.   Main legislation on e -commerce includes the Electronic Transactions Ordinance 2002, which 
gives legal recognition to electronic documen ts, records, information, e -signatures, communications, 
and transactions. The Payment Systems and Electronic Fund Transfers Act 2007  provides for the 
establishment and operations of "Payment System Operators" and "Payment System Providers" in 
Pakistan. The Pakistan Electronic Crimes Act 2016 defines offences and prescribes punishments. In 
addition, as at January 2021, Pakistan was finalizing the Personal Data Protection Bill. A draft version 
of the Bill included a requirement to store all perso nal data on servers within the territory and a 
prohibition on the cross -border transfer of "critical" personal data. Apparently, the scope of "critical" 
personal data was not defined.117 
4.259.   Furthermore, the MOITT recently initiated the process of formulating P akistan's first Cloud 
Policy.  
4.260.   The SECP updated its online system for the registration of e -commerce businesses in 
Pakistan. The SECP recently launched a portal for start -ups and established a separate window in 
the company registration offices throughout t he country. Under Section 21 of the Companies Act 
2017, a company has to register its office address where correspondence can be sent. A physical 
address is also required to deal with disputes that may arise between consumers and sellers. For 
operational m atters that are cross -cutting in nature, a National e -Commerce Council (NeCC) was 
constituted. By the end of November 2021, five meetings of the NeCC have been held: three in 2020 
and two in 2021. It is to work as a single window for policy oversight to fa cilitate e -commerce 
players. According to the authorities, an e -Commerce Cell (Secretariat for the NeCC) was created 
by the MoC.  
4.261.   The E -Commerce Policy proposes measures in various areas: protecting intellectual property 
rights (IPRs) to enhance consumers' trust; enabling online payment and discouraging cash on 
delivery; extending access to finance for SMEs to promote digitization and skill development, for 
example, by setting up an e -commerce information hub; amending relevant legislation to address 
consume rs' concerns in the digital environment; encouraging provincial governments to harmonize 
taxation structure to avoid double taxation; enhancing the outreach of telecommunications 
infrastructure and promoting ICT development; and integrating logistics in th e e-commerce value 
 
human and knowledge capital. The Policy aims to serve as a found ation for the construction of a digital 
ecosystem by: (i)  enabling the digitization of key sectors including e -agriculture, e -health, e -energy, 
e-commerce, and e -justice; and (ii)  developing information and communication technology (ICT) education, 
Interne t of Things, fintech, artificial intelligence and robotics, and cloud computing and big data. MOITT 
(2018), Digital Pakistan Policy . Viewed at: 
http://moib.gov.pk/D ownloads/Policy/DIGITAL_PAKISTAN_POLICY(22 -05-2018).pdf .  
115 Government of Pakistan (2019), e-Commerce Policy of Pakistan. Viewed at: 
https://www.co mmerce.gov.pk/wp -content/uploads/2019/11/e -Commerce_Policy_of_Pakistan_Web.pdf .  
116 Government of Pakistan (2019), e-Commerce Policy of Pakistan.  
117 USTR (2021), 2021 National Trade Estimate Report on Foreign Trade Barriers. Viewed at: 
https://ustr.gov/sites/default/files/files/reports/2021/2021NTE.pdf . WT/TPR/S/424 • Pakistan  
 
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  chain, such as addressing concerns in expeditious processing for export of low -priced consumer 
goods.  
4.262.   Other challenges facing the development of e -commerce include facilitation of cross -border 
trade, and ease in inward and outward remitt ances. In this regard, the SBP introduced a regulatory 
framework for e -commerce exports, to help exporters sell their products through international digital 
markets.  
4.263.   Pakistan already has various initiatives in place to cover some aspects of cybersecurity, such 
as the Electronic Transaction Ordinance 2002 (covering electronic financial transactions and 
records), the Investigation for Fair Trial Act 2013, the Pakistan Telecommunication 
(Re-Organization) Act 1996, and the Prevention of Electronic Crime Act 201 6. The SBP issues 
guidelines on cybersecurity for the financial sector. The National Cyber Security Policy  2021 was 
approved by the Federal Cabinet on 27  July 2021. The Policy also provides the institutional structure 
and mechanisms for its implementation.  A Cyber Governance Policy Committee was constituted, and 
it is mandated to harmonize the working and operational reporting mechanisms of all departments 
dealing with the subject.  
 
 
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  5  APPENDIX TABLES  
Table A1. 1 Merchandise exports by HS section and major HS chapter/subheading, 
2014 -20 
HS Section/chapter/subheading  2014  2015  2016  2017  2018  2019  2020  
Total exports (USD billion)  24.7 22.1 20.5 21.9 23.6 23.7 22.2  
(% of total exports)  
01 Live animals and products  2.9 3.2 3.3 3.2 3.2 3.6 3.5 
03 Fish, crustaceans, molluscs and other aquatic 
invertebrates  1.4 1.5 1.6 1.9 1.8 2.0 1.7 
02 Vegetable products  13.4 14.2 13.2 12.0 14.5 14.4 13.8 
08 Edible fruit and nuts  1.7 1.9 2.1 1.6 1.8 1.7 1.9 
10 Cereals  8.9 8.8 8.4 8.0 9.8 10.0 9.5 
1006 Rice  8.9 8.7 8.3 8.0 8.5 9.6 9.4 
03 Fats and oils  0.5 0.3 0.3 0.2 0.2 0.2 0.2 
04 Prepared food, beverages and tobacco  4.3 3.9 3.3 5.1 5.1 3.8 3.5 
22 Beverages, spirits and vinegar  1.4 1.4 1.2 1.7 1.9 1.4 1.6 
05 Mineral products  5.8 3.9 3.4 3.5 4.4 3.8 3.1 
25 Salt, sulphur, earth, stone, plaster, lime and 
cement  2.8 2.3 2.2 1.8 1.9 1.8 1.9 
06 Chemicals and products thereof  1.7 1.6 1.7 1.9 1.6 1.6 2.0 
07 Plastics and rubber  1.5 1.4 1.4 1.4 1.4 1.7 1.7 
39 Plastics and articles thereof  1.5 1.3 1.3 1.2 1.3 1.5 1.5 
08 Raw hides and skins; leather, furskins and articles 
thereof  5.2 5.0 4.8 4.4 4.1 3.6 3.3 
42 Articles of leather, animal gut, harness, travel 
goods  3.0 3.1 3.1 2.9 2.8 2.7 2.6 
4203 Articles of clothing accessories, of leather 
or of composition leather  2.8 2.9 2.9 2.7 2.6 2.5 2.4 
09 Wood, cork, straw  0.2 0.2 0.2 0.2 0.2 0.2 0.2 
10 Pulp of wood; paper and paperboard  0.3 0.3 0.5 0.5 0.4 0.2 0.2 
11 Textiles and textile articles  55.7 58.5 60.4 59.4 57.4 57.5 58.9 
52 Cotton  19.1 18.3 17.0 16.0 14.8 13.7 11.9 
5205 Cotton yarn, containing 85% or more by 
weight of cotton  7.6 6.9 5.8 5.6 5.1 4.5 3.6 
5208 Woven fabrics of cotton, containing 85% or 
more by weight of cotton, weighing <= 200 
g/m2 3.0 2.8 2.8 2.5 2.6 2.5 2.8 
5209 Woven fabrics of cotton, containing 85% or 
more by weight of cotton, weighing > 200 g/m2 4.3 4.6 4.6 4.3 4.1 3.8 3.0 
61 Articles of apparel and clothing accessories, 
knitted or crocheted  9.7 10.7 11.4 11.5 12.1 12.7 13.8 
6103 Men's or boys' suits, jackets, blazers, 
trousers, shorts (..)  1.7 2.0 2.1 2.1 2.4 2.3 2.4 
62 Articles of apparel, accessories, not knitted or 
crocheted  8.0 9.6 11.0 11.3 10.9 11.8 11.8 
6203 Men's or boys' suits, jackets, blazers, 
trousers, shorts (..)  4.4 5.3 7.2 9.1 9.2 9.8 9.4 
63 Other made textile articles, sets, worn clothing 
etc 15.8 17.0 18.5 18.1 17.1 17.1 19.2 
6302 Bed linen, table linen, toilet linen and 
kitchen linen  12.2 13.2 14.6 14.3 13.7 13.7 14.6 
12 Footwear, headgear, etc.  0.5 0.5 0.5 0.5 0.5 0.6 0.6 
13 Articles of stone, plaster, cement  0.3 0.2 0.2 0.2 0.2 0.2 0.2 
14 Precious stones and metals  0.5 0.1 0.1 0.1 0.1 0.1 0.1 
15 Base metals and articles thereof  2.2 1.8 1.7 1.9 2.0 2.7 3.5 
74 Copper and articles thereof  0.6 0.4 0.3 0.6 0.9 1.5 2.0 
16 Machinery, electrical equipment  1.4 1.2 1.3 1.3 1.3 1.4 1.4 
17 Transport equipment  0.3 0.3 0.3 0.4 0.3 0.9 0.4 
18 Precision equipment  1.5 1.7 1.8 1.9 1.7 1.9 1.7 
90 Optical, photographic, measuring, medical 
instruments (..)  1.5 1.7 1.8 1.9 1.7 1.9 1.7 
19 Arms and ammunition  0.0 0.0 0.0 0.0 0.0 0.1 0.0 
20 Miscellaneous manufactured articles  1.6 1.6 1.6 1.5 1.4 1.4 1.5 
21 Works of art, etc.  0.0 0.0 0.0 0.5 0.0 0.0 0.0 
Other  0.0 0.0 0.0 0.0 0.0 0.0 0.2 
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
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  Table A1. 2 Merchandise imports by HS section and major HS chapter/subheading, 
2014 -20 
HS Section/chapter/subheading  2014  2015  2016  2017  2018  2019  2020  
Total imports (USD billion)  47.5 44.0 47.0 57.4 60.2 50.1 45.8  
(% of total imports)  
01 Live animals and products  0.4 0.6 0.5 0.4 0.3 0.3 0.3 
02 Vegetable products  5.1 5.7 6.8 6.3 5.5 5.8 8.7 
07 Edible vegetables and certain roots and 
tubers  1.4 1.5 2.0 1.7 1.1 1.2 2.0 
09 Coffee, tea, mate and spices  0.9 1.3 1.3 1.2 1.2 1.3 1.7 
10 Cereals  0.6 0.2 0.3 0.2 0.2 0.2 1.6 
12 Oil seed and oleaginous fruit; 
miscellaneous grains, seeds and fruit  1.6 1.8 2.2 2.4 2.4 2.4 2.8 
1201 Soya beans, whether or not 
broken  0.0 0.6 0.8 1.3 1.6 1.5 1.8 
03 Fats and oils  4.5 4.2 4.1 4.1 3.5 3.9 4.9 
1511 Palm oil and its fractions, not 
chemically modified  4.1 3.8 3.6 3.6 3.2 3.5 4.6 
04 Prepared food, beverages and tobacco  1.9 1.9 1.4 1.2 0.9 1.0 1.3 
05 Mineral products  31.5 23.1 20.6 24.1 28.7 29.0 22.8 
27 Mineral fuels and oils  31.2 22.8 20.3 23.9 28.5 28.7 22.5 
2701 Coal; briquettes, ovoids and 
similar solid fuels manufactured from 
coal 1.0 1.1 1.1 1.9 2.7 2.8 2.7 
2709 Petroleum oils and oils obtained 
from bituminous minerals; crude  11.8 6.9 4.2 5.5 8.2 7.8 5.0 
2710 Petroleum oils and oils from 
bituminous minerals, not crude  18.0 13.4 12.2 12.9 11.4 10.7 9.2 
2711 Petroleum gases and other 
gaseous hydrocarbons  0.1 1.2 2.3 3.4 5.9 7.1 5.3 
06 Chemicals and products thereof  11.6 12.9 11.3 10.8 11.6 12.0 12.2 
29 Organic chemicals  4.1 4.2 4.1 4.1 4.6 4.7 4.7 
30 Pharmaceutical products  1.6 1.5 1.5 1.4 1.5 1.6 1.7 
38 Miscellaneous chemical products  1.5 1.7 1.5 1.4 1.3 1.5 1.9 
07 Plastics and rubber  5.2 5.6 5.4 5.2 5.0 5.2 5.9 
39 Plastics and articles thereof  4.1 4.4 4.1 4.0 4.1 4.4 4.7 
08 Raw hides and skins; leather, furskins and 
articles thereof  0.3 0.2 0.2 0.2 0.1 0.2 0.1 
09 Wood, cork, straw  0.3 0.4 0.4 0.4 0.4 0.4 0.4 
10 Pulp of wood; paper and paperboard  2.1 1.6 1.5 1.4 1.5 1.4 1.4 
11 Textiles and textile articles  6.1 6.9 6.6 6.2 6.3 5.8 7.1 
52 Cotton  1.6 1.5 1.5 1.7 2.1 1.7 3.0 
5201 Cotton, not carded or combed  1.1 1.2 1.2 1.3 1.7 1.4 2.9 
12 Footwear, headgear, etc.  0.2 0.2 0.2 0.2 0.2 0.2 0.1 
13 Articles of stone, plaster, cement  0.7 0.8 0.9 0.8 0.7 0.6 0.6 
14 Precious stones and metals  0.2 0.1 0.1 0.1 0.1 0.1 0.1 
15 Base metals and articles thereof  7.6 9.0 9.2 9.1 9.1 9.3 9.5 
72 Iron and steel  4.8 5.8 5.9 6.0 6.1 6.2 6.9 
7204 Ferrous waste and scrap; 
remelting scrap ingots of iron or steel  1.9 2.3 2.2 2.5 2.6 3.0 3.6 
16 Machinery, electrical equipment  15.3 17.9 21.8 20.2 17.5 17.9 18.8 
84 Machinery and mechanical appliances, 
parts thereof  8.3 9.2 12.4 11.9 10.4 9.4 8.9 
85 Electrical machineries and parts thereof  7.0 8.6 9.4 8.3 7.1 8.5 9.9 
8517 Telephone sets, including 
telephones for cellular networks (..)  2.8 2.7 2.5 2.2 2.1 2.8 4.5 
17 Transport equipment  4.9 6.0 6.3 6.7 6.1 4.5 3.8 
87 Vehicles other than railway, tramway  2.8 4.0 4.5 4.6 4.3 2.9 3.1 
8703 Motor vehicles for the transport of 
persons  1.5 2.0 2.1 2.4 2.2 1.6 1.9 
18 Precision equipment  1.2 1.6 1.5 1.5 1.5 1.5 1.4 
19 Arms and ammunition  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
20 Miscellaneous manufactured articles  1.0 1.1 1.0 1.1 0.8 0.7 0.5 
21 Works of art, etc.  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Other  0.0 0.1 0.2 0.1 0.1 0.3 0.0 
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
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  Table A1. 3 Merchandise exports by destination, 2014 -20 
  2014  2015  2016  2017  2018  2019  2020  
Total exports (USD billion)  24.7 22.1 20.5 21.9 23.6 23.7 22.2  
(% of total exports)  
Americas  17.7 19.6 19.7 19.2 19.1 19.9 21.4 
United  States  14.7 16.6 16.7 16.3 16.1 17.0 18.6 
Other America  3.0 3.0 3.0 3.0 3.0 2.9 2.8 
Canada  0.9 1.0 1.1 1.1 1.1 1.2 1.3 
Europe  31.1 31.4 35.2 36.2 35.6 36.0 37.8 
EU-27 22.5 22.9 26.1 26.8 26.5 27.3 28.0 
Germany  4.9 5.2 5.8 5.9 5.5 5.6 6.3 
Netherlands  2.8 3.0 3.2 3.5 4.0 4.4 4.9 
Spain  3.2 3.5 4.1 4.1 3.9 4.0 3.6 
Italy 3.1 2.8 3.2 3.2 3.3 3.4 3.2 
Belgium  2.7 2.7 3.2 3.2 2.8 2.5 2.6 
France  1.7 1.6 1.8 1.8 1.9 1.9 1.8 
Poland  0.6 0.6 0.8 0.9 1.0 1.1 1.2 
Denmark  0.4 0.5 0.7 0.7 0.7 0.8 0.9 
EFTA 0.3 0.3 0.3 0.3 0.3 0.3 0.3 
Other Europe  8.3 8.2 8.8 9.1 8.8 8.4 9.4 
United Kingdom  6.7 7.1 7.6 7.5 7.3 7.1 7.8 
Turkey  1.6 1.1 1.2 1.5 1.3 1.2 1.6 
CISa 1.3 1.3 1.4 1.2 1.5 1.4 1.3 
Africa  7.5 7.2 6.5 6.8 6.3 6.0 6.3 
Kenya  1.3 1.3 1.3 1.5 1.2 1.1 1.2 
Middle East  10.5 8.8 8.3 7.8 7.9 9.7 9.7 
United Arab Emirates  5.4 4.1 3.8 4.0 4.2 5.0 4.9 
Saudi Arabia, Kingdom of  2.1 2.0 1.9 1.5 1.3 1.7 1.9 
Asia 31.9 31.7 29.0 28.8 29.6 27.1 23.5 
China  9.1 8.8 7.7 6.9 7.7 8.6 8.4 
Japan  0.8 0.8 0.8 1.0 0.9 0.9 0.7 
Other Asia  22.0 22.1 20.4 20.9 21.0 17.6 14.3 
Afghanistan  7.6 7.8 6.7 6.4 5.7 5.0 3.9 
Bangladesh  2.8 3.2 3.2 3.0 3.3 3.3 2.6 
Sri Lanka  1.1 1.2 1.2 1.2 1.5 1.4 1.1 
Malaysia  0.9 0.8 0.7 0.6 0.7 1.0 1.0 
Australia  0.7 0.8 1.2 1.1 1.0 0.9 1.0 
Korea, Republic of  1.5 1.3 1.2 2.1 1.3 1.0 0.8 
Memorandum:         
EU-28 29.2 30.1 33.7 34.3 33.8 34.4 35.8 
a  Commonwealth of Independent States, including certain associate and former member States.  
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
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  Table A1. 4 Merchandise imports by origin, 2014 -20 
  2014  2015  2016  2017  2018  2019  2020  
Total imports (USD billion)  47.5 44.0 47.0 57.4 60.2 50.1 45.8  
(% of total imports)  
Americas  5.8 7.2 7.8 7.9 7.4 7.9 9.6 
United  States  3.8 4.4 4.3 4.9 4.9 5.2 5.6 
Other America  2.1 2.9 3.6 2.9 2.5 2.7 3.9 
Brazil  0.3 0.6 1.0 1.1 0.8 1.0 2.1 
Canada  0.8 1.0 1.6 1.1 1.0 1.1 1.1 
Europe  11.5 12.1 12.7 12.3 11.6 13.1 11.8 
EU-27 8.0 8.4 8.8 8.6 7.6 9.2 7.6 
Germany  2.3 2.2 2.1 1.9 2.2 1.9 1.9 
EFTA 0.7 0.6 0.6 0.6 0.7 0.6 0.8 
Other Europe  2.8 3.1 3.3 3.1 3.3 3.4 3.4 
United Kingdom  1.3 1.4 1.3 1.3 1.4 1.4 1.3 
Other Europe, n.e.s.  1.0 1.2 1.4 1.3 1.2 1.2 1.1 
CISa 1.4 0.8 0.9 1.0 0.9 0.7 2.2 
Russian  Federation  0.5 0.4 0.5 0.5 0.6 0.4 1.3 
Africa  3.0 3.9 3.5 3.9 5.3 5.8 5.8 
South  Africa  0.9 1.1 1.1 1.8 2.1 2.3 2.0 
Kenya  0.6 0.8 0.9 0.8 0.8 0.8 1.1 
Middle East  33.9 26.7 23.0 25.3 28.3 26.9 22.1 
United Arab Emirates  14.9 13.0 13.2 13.1 14.4 12.6 9.8 
Saudi Arabia, Kingdom of  9.3 6.8 3.9 4.8 5.4 4.9 4.1 
Qatar  0.4 0.7 1.6 2.8 4.0 4.4 3.2 
Kuwait, State of  6.2 3.9 2.7 2.6 2.3 2.5 2.5 
Oman  2.4 1.4 0.5 1.1 1.3 1.2 1.3 
Asia 44.3 49.3 52.0 49.6 46.5 45.5 48.5 
China  20.2 25.0 29.1 26.8 24.2 24.8 27.3 
Japan  3.7 3.9 4.2 4.0 3.8 2.7 2.5 
Other Asia  20.5 20.3 18.7 18.8 18.5 18.0 18.8 
Indonesia  4.4 4.6 4.4 4.5 4.2 4.4 5.3 
Malaysia  2.7 2.1 2.0 1.9 1.9 1.9 2.4 
Korea, Republic of  1.4 1.6 1.6 1.5 1.6 1.5 2.3 
Thailand  1.5 1.9 2.0 2.2 2.4 2.1 2.0 
Chinese  Taipei  0.9 0.9 0.9 0.8 0.9 1.3 1.4 
Singapore  2.4 2.0 1.3 1.5 1.4 1.6 1.3 
Afghanistan  0.8 0.9 0.8 0.7 0.8 1.2 1.1 
Memorandum:         
EU-28 9.3 9.7 10.2 10.0 9.1 10.5 9.0 
a Commonwealth of Independent States, including certain associate and former member States.  
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
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  Table A2. 1 WTO notifications, August 2015 -August 2021  
Legal basis, instrument, 
or provision  Requirement  WTO documents  
Agreement on Implementation of Article  VI of the GATT  1994 (Anti -dumping)  
Article  16.4 Anti-dumping actions 
(semi -annua l or ad  hoc) G/ADP/N/358, 15/07/2021  
G/ADP/N/350/PAK, 15/04/2021  
G/ADP/N/354, 13/04/2021  
G/ADP/N/353, 10/03/2021  
G/ADP/N/352, 23/02/2021  
G/ADP/N/351, 26/01/2021  
G/ADP/N/348, 13/11/2020  
G/ADP/N/346, 09/09/2020  
G/ADP/N/345, 19/08/2020  
G/ADP/N/342/PAK, 13/08/2020  
G/ADP/N/340, 24/04/2020  
G/ADP/N/339, 30/03/2020  
G/ADP/N/335/PAK, 16/03/2020  
G/ADP/N/338, 27/02/2020  
G/ADP/N/333, 31/10/2019  
G/ADP/N/328/PAK, 21/10/2019  
G/ADP/N/330, 05/08/2019  
G/ADP/N/329, 28/06/2019  
G/ADP/N/322/PAK, 15/04/2019  
G/ADP/N/324, 15/02/2019  
G/ADP/N/321, 07/01/2019  
G/ADP/N/320, 29/11/2018  
G/ADP/N/319, 18/10/2018  
G/ADP/N/314/PAK, 28/08/2018  
G/ADP/N/317, 21/08/2018  
G/ADP/N/316, 27/07/2018  
G/ADP/N/315, 29/06/2018  
G/ADP/N/313, 30/05/2018  
G/ADP/N/311, 26/03/2018  
G/ADP/N/308/PAK, 26/02/2018  
G/ADP/N/310, 22/02/2018  
G/ADP/N/309, 24/01/2018  
G/ADP/N/306, 14/12/2017  
G/ADP/N/305, 19/10/2017  
G/ADP/N/304, 20/09/2017  
G/ADP/N/303, 30/08/2017  
G/ADP/N/300/PAK, 31/07/2017  
G/ADP/N/302, 18/07/2017  
G/ADP/N/301, 28/06/2017  
G/ADP/N/ 298, 20/04/2017  
G/ADP/N/297, 23/03/2017  
G/ADP/N/296, 24/02/2017  
G/ADP/N/294/PAK, 07/02/2017  
G/ADP/N/295, 30/01/2017  
G/ADP/N/293, 13/12/2016  
G/ADP/N/286/PAK/Rev.1, 05/10/2016  
G/ADP/N/286/PAK, 29/08/2016  
G/ADP/N/287, 23/06/2016  
G/ADP/N/285, 31/05/2016  
G/ADP/ N/284, 19/04/2016  
G/ADP/N/280/PAK, 25/02/2016  
G/ADP/N/282, 23/02/2016  
G/ADP/N/281, 21/01/2016  
G/ADP/N/278, 25/11/2015  
G/ADP/N/277, 15/10/2015  
G/ADP/N/276, 16/09/2015  
G/ADP/N/272/PAK, 31/08/2015  
G/ADP/N/275, 31/08/2015  
Article  18.5  Laws/regulations (and 
changes thereto, including 
changes in the 
administration of such 
laws)  G/ADP/N/1/PAK/3;  
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  Legal basis, instrument, 
or provision  Requirement  WTO documents  
Agreement on Subsidies and Countervailing Measures  
Article  25.11  Countervailing duty 
actions (preliminary and 
final) G/SCM/N/371/Add.1, 14/04/2021  
G/SCM/N/363/Add.1, 14/10/2020  
G/SCM/N/356/Add.1, 04/05/2020  
G/SCM/N/349/Add.1, 15/11/2019  
G/SCM/N/342/Add.1, 24/04/2019  
G/SCM/N/334/Add.1, 19/10/2018  
G/SCM/N/328/PAK, 26/02/2018  
G/SCM/N/321/PAK, 03/08/2 017 
G/SCM/N/313/PAK, 28/02/2017  
G/SCM/N/305/PAK, 29/08/2016  
G/SCM/N/298/Add.1, 22/04/2016  
G/SCM/N/289/Add.1, 22/10/2015  
Article  32.6 Laws/regulations (and 
changes thereto, including 
changes in the 
administration of such 
laws)  G/ADP/N/1/PAK/3; G/SCM/N/1/PAK/3, 
20/01/2016  
Agreement on Safeguards  
Article  12.6 Administrative 
arrangements; 
laws/regulations (and 
changes thereto)  G/SG/N/1/PAK/2/Suppl.1; 
G/SG/N/1/PAK/2/Suppl.2, 20/05/2016  
G/SG/N/1/PAK/3/Corr.1; 
G/SG/N/1/PAK/3/Suppl.1 /Corr.1, 19/05/2016  
Understanding of the Interpretation of Article  XVII of GATT  1994  
Article  XVII:4(a)  Foreign trade by state 
trading enterprises  G/STR/N/17/PAK; G/STR/N/18/PAK, 09/04/2021  
G/STR/N/14/PAK; G/STR/N/15/PAK; 
G/STR/N/16/PAK, 20/03/2017  
Agreement on Trade -Related Aspects of Intellectual Property Rights  
Article  63.2 Laws and regulations  IP/N71/PAK/3; IP/N/1/PAK/G/1, 30/09/2020  
Agreement on Technical Barriers to Trade  
Article  10.6 Measures in force  G/TBT/N/PAK/176 -81, 10/02/2 021 
G/TBT/N/PAK/129 -175, 09/02/2021  
G/TBT/N/PAK/121 -128, 08/02/2021  
G/TBT/N/PAK/120, 13/05/2021  
G/TBT/N/PAK/119, 12/05/2021  
G/TBT/N/PAK/115 -118, 16/07/2018  
G/TBT/N/PAK/112 -114, 25/05/2018  
G/TBT/N/PAK/70/Corr.1 -77/Corr.1, 24/05/2018  
G/TBT/N/PAK/68/Corr.1, 24/05/2018  
G/TBT/N/PAK/66/Corr.1, 24/05/2018  
G/TBT/N/PAK/8/Corr.1, 24/05/2018  
G/TBT/N/PAK/111, 11/07/2017  
G/TBT/N/PAK/106 -110, 26/10/2016  
G/TBT/N/PAK/98 -105, 12/01/2016  
G/TBT/N/PAK/93 -97, 11/01/2016  
Agreement on Agriculture  
Article  18.2 Domestic support (DS:1)  G/AG/N/PAK/20, 16/03/2021  
G/AG/N/PAK/19, 16/03/2021  
G/AG/N/PAK/18, 16/03/2021  
G/AG/N/PAK/17, 16/03/2021  
General Agreement on Trade in Services (GATS)  
Articles III:4 and IV:2  Contact enquiry points  S/ENQ/78/Rev.18, 01 /02/2019  
Enabling Clause, Paragraph  4(a)  
Regional Trade 
Agreements  WT/COMTD/RTA12/N/1, 15/11/2019  
WT/COMTD/N/47, 02/10/2015  
Agreement on Trade Facilitation  
Category commitments   G/TFA/N/PAK/1/Add.3, 30/06/2020  
G/TFA/N/PAK/1/Add.2, 27/08/2019  
G/TFA /N/PAK/1/Add.1, 12/03/2018  
G/TFA/N/PAK/1/Corr.1, 20/06/2017  
G/TFA/N/PAK/1, 15/06/2017  
Articles 1.4, 10.6.2, 
12.2.2, and 22.3   G/TFA/N/PAK/3, 04/11/2019  
G/TFA/N/PAK/2/Add.1, 11/11/2019  
G/TFA/N/PAK/2/Rev.1, 23/11/2018  
G/TFA/N/PAK/2, 15/11/2018  
Source:  WTO Secretariat.   WT/TPR/S/424 • Pakistan  
 
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  Table A3. 1 Tariff summary, 2020/21 (as at end -June 2021)  
  Number 
of lines  Average 
(%) Range (%)  Coefficient 
of variation 
(%) Duty 
free 
(%) 
Total  7,370  12.1 (12.0)  0-100 1.1 28.9 
HS Chapters 01-24 1,056  14.1 (14.0)  3-90 (0.8 -93.6)  0.9 0.0 
HS Chapters 25 -97 6,314  11.7 0-100 1.1 33.7 
By WTO category       
WTO agricultural products  883 13.2 (13.0)  0-90 (0 -93.6)  1.0 6.1 
Animals and products thereof  118 11.5 3-20 0.7 0.0 
Dairy products  24 20.0 20-20 0.0 0.0 
Fruit, vegetables, and plants  248 13.3 (13.6)  3-20 (3 -93.6)  0.6 (0.7)  0.0 
Coffee and tea  30 11.7 3-20 0.4 0.0 
Cereals and preparations  108 14.0 3-20 0.5 0.0 
Oils seeds, fats, oil and their products  96 9.5 (8.3)  0-20 0.6 (0.7)  1.0 
Sugars and confectionery  27 14.8 3-20 0.4 0.0 
Beverages, spirits and tobacco  53 42.5 11-90 0.8 0.0 
Cotton  11 0.0 0-0 0.0 100.0  
Other agricultural products, n.e.s.  168 5.7 0-20 1.1 25.0 
WTO non -agricultural products  6,487  11.9 0-100 1.1 32.0 
Fish and fishery products  265 13.9 3-20 0.5 0.0 
Minerals and metals  1,193  10.6 0-35 0.9 34.8 
Chemicals and photographic supplies  1,336  5.6 0-20 1.4 59.6 
Wood, pulp, paper and furniture  348 12.9 0-35 0.7 27.6 
Textiles  710 11.8 0-35 0.5 13.9 
Clothing  260 19.9 3-20 0.1 0.0 
Leather, rubber, footwear and travel goods  221 14.8 0-35 0.8 25.8 
Non-electric machinery  810 7.7 0-35 1.4 49.8 
Electric machinery  423 13.8 0-35 0.8 20.6 
Transport equipment  331 39.4 0-100 0.7 0.9 
Non-agricultural products, n.e.s.  556 12.0 0-35 0.8 20.1 
Petroleum  34 10.6 0-20 0.7 17.6 
By ISIC sector       
ISIC 1 – Agriculture, hunting and fishing  454 7.8 (7.9)  0-20 (0 -93.6)  0.9 (1.0)  13.4 
ISIC 2 – Mining  108 3.4 0-20 1.9 73.1 
ISIC 3 – Manufacturing  6,807  12.5 0-100 1.1 29.2 
Manufacturing excluding food processing  6,146  12.0 0-100 1.1 32.2 
Electrical energy  1 3.0 3 0.0 0.0 
By stage of processing       
First stage of processing  874 7.5 (7.6)  0-20 (0 -93.6)  1.0 (1.1)  30.0 
Semi-processed products  2,315  7.2 0-35 1.1 46.5 
Fully processed products  4,181  15.7 (15.6)  0-100 0.9 18.9 
By HS section       
01 Live animals and products  388 12.5 3-20 0.6 0.0 
02 Vegetable products  362 10.2 (10.4)  3-20 (3 -93.6)  0.7 (0.8)  0.0 
03 Fats and oils  56 11.7 (8.1)  3-20 (0.8 -20) 0.5 (0.6) 0.0 
04 Prepared food, beverages and tobacco  250 22.5 3-90 0.8 0.0 
05 Mineral products  197 5.6 0-20 1.3 51.8 
06 Chemicals and products thereof  1,249  4.6 0-20 1.6 64.7 
07 Plastics, rubber, and articles thereof  306 15.5 0-35 0.6 15.7 
08 Raw hides and skins, leather, and its products  93 7.8 0-20 1.2 51.6 
09 Wood and articles of wood  134 9.9 0-20 1.0 47.0 
10 Pulp of wood, paper and paperboard  178 13.6 0-20 0.6 18.5 
11 Textiles and textile articles  962 13.4 0-20 0.5 13.0 
12 Footwear, headgear, etc.  51 20.0 20-20 0.0 0.0 
13 Articles of stone, plaster, cement  194 17.0 0-35 0.5 10.3 
14 Precious stones and metals, pearls  60 1.4 (1.3)  0-11 1.9 (2.0)  63.3 
15 Base metals and articles thereof  764 11.4 0-35 0.9 31.2 
16 Machinery, electrical equipment, etc.  1,256  9.7 0-35 1.2 39.7 
17 Transport equipment  345 38.6 0-100 0.7 0.9 
18 Precision equipment  264 6.7 0-35 1.4 39.0 
19 Arms and ammunition  51 18.4 16-20 0.1 0.0 
20 Miscellaneous manufactured articles  203 18.3 3-35 0.3 0.0 
21 Works of art, etc.  7 4.1 3-11 0.7 0.0 
Note:  Figures in brackets include AVEs for specific rates, as available.  
Source:  WTO Secretariat calculations, based on data provided by the authorities and the Federal Board of 
Revenue. Viewed at: https://www.fbr.gov.pk/categ/customs -tariff/51149/70853/1311 88. 
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  Table A3. 2 Prohibited imports, 2020  
Description  
Translation of the Holy Quran without Arabic text  
Goods (including their containers) bearing any obscene pictures, writings, inscriptions or visible representations  
Anti-Islamic, obscene or subversive literature  
Any goods containing ingredients or parts which may be repugnant to the injunctions of Islam as laid down in the 
Holy Quran and Sunnah of the Holy Prophet (Peace be upon him), including pigs,  hogs, boars and swine, and their 
products and by -products  
Any edible product not fit for human consumption  
Goods (including their containers) bearing any words or inscription of a religious connotation, the use or disposal of 
which may injure the religious feelings of any sect, class or group of people in Pakistan  
Factory rejects and goods of job lot/stock lot or substandard quality except those mentioned below:  
1. Waste, seconds and cutting of:  
 iron and steel sheets and plates in cut length or c oils; 
 tin sheets and plates of one side not less than 45.7 cm (18 inch);  
 stainless steel sheets, coils, plates and circles of AISI-200, AISI-300 and or AISI -400 series only;  
 Cotton waste (HS No.  5202.0000); and  
 Granules made by the recycling of plastic s waste.  
2. Re-rollable scrap (7204.1010, 7204.4910)  
The scrap having width not exceeding 1000 mm with thickness 6 mm and above and a length not exceeding 
2.5 metres, consisting of mill rejects and crop ends of ingots, billets, slabs, blooms and including cuttings of sheets 
and plates, pipes and bars whether in pieces or in rolled strips, cuttings of ships plates, used and pitted rails and 
girders, whereas in case of girders and pipes length shall be 1.5 metres  
Vetches (whole grain, split or any other form ) 
Cocoa leaves, poppy straw and cannabis herbs  
Cannabis resins and balsams  
Opium  
Concentrate of poppy straw; extracts and tinctures of cannabis  
Used vegetable ghee and cooking oil  
Alcoholic beverages and spirits (excluding ethyl alcohol of industrial grade), including brewing and distilling dregs 
and waste, wine lees and argol  
Hazardous wastes as defined and classified in the Basel Convention  
Used lubricating, hydraulic, transformer oils and similar oils or waste oils  
Other (benzidine and its derivatives)  
Paraphence -tole carbamide and 5 -Nitro-2 proxy -aniline in both tablet and powder or crystalline forms  
Allyl-isothio -cyanate  
Caffeine citrate  
Insulin preparations and syringes in 40 I.U. strength  
Dyes containing benzidine  
Fireworks  
Other (pyrotechnic articles)  
Cinematograph film wholly or partly exposed or developed in any Pakistani or Indian language, with or without a sound 
track and depicting Pakistani or Indian way of living either silent or dubbed, or in which leading roles have been played 
by Pakistani or Indian actors or actresses  
Hospital waste of all kind, used sewerage pipes and used chemical containers  
Re-treaded tyres  
Used pneumatic tyres  
Fur skins and manufactures thereof, other than raw fur skins and tanned or dressed fur skins of sheep, lambs, rabbits, 
goats, kids thereof, calf and other animal fur not internationally prohibited  
Clothing (of asbestos)  
Digital Enhanced Cordless Telecommunication (DECT) 6.0 phone  
CFC gas based refrigerators, deep -freezers and other refrigerating cooling, chilling equipment, CFC based air 
conditioning equipment  and CFC based compressors of these equipment  
Brewery machinery/machinery for alcoholic  beverages  
Pressure horns and parts thereof  
Tanks and other armoured fighting vehicles, motorized, whether or not fitted with weapons and parts of such vehicles, 
other than armoured security vans  
Military weapons, machine -guns, sub -machine -guns, automat ic rifles of all calibers and other military fire arms and 
projectiles (other than revolvers and pistols)  
Revolvers and pistols of prohibited bores and of calibers higher than 0.46 inches bore  
Sheesha (tobacco and non -tobacco) and related substances.  
Other (fire arms and similar devices which operate by firing of an explosive charge), excluding ring blaster tools / 
boulder ballistic guns/riveting tools  
Other arms (for example, spring guns, air pistols and truncheons), excluding S. No.  61 of Part I of Appendix B  
Parts and accessories of articles of heading No.  93.01 to 93.04, excluding parts and accessories appearing against 
S. Nos. 65 & 66 of Part I of Appendix B  
Ammunition and parts of ammunition, excluding ammunition for weapons of non -prohibited b ores and cartridges for 
riveting or similar tools  
Gambling equipment  
Stolen goods  
Monosodium Glutamate also known as Ajinomoto Salt  
Source:  Ministry of Commerce, Import Policy Order 2020, Appendix A.   WT/TPR/S/424 • Pakistan  
 
- 145 - 
 
  Table A3. 3 Restricted imports, 2020  
Commodity description  Conditions  
Part 1 Health and Safety Requirements  
Live animals, animal semen and embryos  (i) Importable subject to quarantine requirement of Animal Quarantine 
Department of Ministry of National Food Security & Research, 
Government of Pakistan; and  
(ii) import of wildlife species including those mentioned in Appendix II 
of the CITES shall be allowed only after obtaining NOC from 
National Council for Conservation of Wildlife (NCCW)  
Fish and fishery products  Importable subject to quarantine requirement of Marine and Fishery 
Department of Ministry of National Food Security and Research, 
Government of Pakistan  
All species of plants and parts thereof.  
Whether living or dead, stems, bra nches, tubers, 
bulbs, corms, stock, bud -wood, layers, slips, 
suckers, green scum on stagnant pool, leaves 
fruits rhizomes etc.  Importable subject to compliance of phytosanitary requirements and 
drawing of samples and testing quality by Department of Plant Protection 
and Federal Seed Certification Agency of Ministry of National Food Security 
and Research, Government of Pakistan  
Sugarcane seeds, banana and suckers, vegetable 
seeds, seed potatoes, oil seeds, flower seeds and 
other field crop seeds including T ubers, Rhizomes, 
roots, cuttings, etc.  (i) Importable subject to drawing of samples and testing of quality by 
Federal Seed Certification Agency  and Department of Plant  Protection 
of Ministry of National Food Security & Research, Government of 
Pakistan;  
(ii) import of rice seeds shall be subject to strict quarantine measures 
prescribed under the Seed Act 1976 (XXIX of 1976), and any other 
related law;  
(iii) import of opium poppy seeds shall be allowed from those countries 
only where it is legally produced  
Fresh and dry fruits  Importable subject to production of aflatoxin report to the effect that the 
consignment is free from any pests/diseases, to be certified by Department 
of Plants Protection, Ministry of National Food Security & Research, 
Government of Pakistan  
Betel nuts (Areca)  Importable subject to production of phytosanitary certificate issued by the 
competent authorities of the country of origin/export confirming that the 
exported goods are free from infestation; and are fit for human 
consumption  
Red chillies, (whole)  Importable subject to production of aflatoxin report to the effect that 
the consignment is free from any pests/diseases, to be certified by the 
Dept. of Plant Protection, Ministry of National Food Security & Research, 
Government of Pa kistan  
Wheat  Importable subject to the specifications notified by the Ministry of National 
Food Security & Research, Government of Pakistan from time to time and 
subject to pre -shipment inspection by approved PSI agencies as per 
Appendix D  
Cotton seed  Importable with prior approval of the Ministry of National Food Security & 
Research, Government of Pakistan  
Crude palm oil  (i) Importable only by the manufacturers having valid licence and 
registration from Pakistan Standard Quality Control Authority 
(PSQCA) for further processing and refining. Manufacturers who 
import oil shall not be allowed to sell palm oil in crude form to non -
manufacturers;  
(ii) commercial importers importing bulk crude palm oil for storages 
shall also be allowed to import subject to sa feguard mechanism to 
be notified by the Federal Board of Revenue  
Palm stearin  It will have distinct fat soluble colour to conform to the Lovibond colour 
range of 10 red minimum on tintometer 5  ¼ Cell to ensure that palm 
stearin is not misused for edible o il/ghee making  
Cigars, cheroots, cigarillos and cigarettes, of 
tobacco or of tobacco substitutes  Packets should carry the warning "smoking is injurious to health"  
All edible products  Imports shall be subject to following conditions:  
(i) They must be fit for human consumption;  
(ii)  They shall be free of any 'haram' element or ingredients;  
(iii) Edible products shall have at least 66% (2/3rd) shelf life, 
remaining from the date of manufacturing;  
 (iii a)  The ingredients and details of the product (e.g.  nutritional 
facts, usage instructions etc.) of food products are printed in Urdu 
and English languages on the consumer packaging;  
 (iii b)  The logo of the Halal certification body is printed on the 
consumer packaging;  
 (iii c)  The labelling under clause s (iii a) & (iii b) above shall not be 
in the form of a sticker, overprinting, stamp or scratched labelling;  
 (iii d)  The shipment is accompanied by a 'Halal certificate' issued 
by a Halal Certification Body, accredited with an Accrediting Body 
(AB) which  is a member of International Halal Accreditation Forum 
(IHAF) or Standards and Metrology Institute for Islamic Countries 
(SMIIC);  
(v)  That, in case of meat, it was obtained from 'halal animals and 
slaughtered in accordance with the Islamic injunctions;  
(vi) Import of edible oil in bulk quantity shall be on landed weight and 
quality basis.  WT/TPR/S/424 • Pakistan  
 
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  Commodity description  Conditions  
Radioactive materials and radiation apparatus  Import of radioactive materials and apparatus as specified in Annex B -
1, will be subject to the prior approval of Pakistan  Nuclear Regulatory 
Authority  
Asbestos  Import of asbestos of chrysotile type of following specification only shall 
be allowed:  
Specification:  
Colour -white to grey; and  
Density 2.4g/cm3 to 2.6g/cm3 
Conditions:  
Certificate from the exporter confirming that type of asbestos being 
exported is chrysotile asbestos with the above specifications. The 
importers of asbestos will clearly mention the type of the asbestos 
being imported in the import documents  
Arsenic and arsenic compound  Importable by  industrial consumers who have valid licences issued by 
the concerned Environment Protection Agency/ Department under PEPA 
1997 
Calcium carbide, whether or not chemically 
defined  Importable with prior approval of the Department of Explosives  
Ozone Deplet ing Substances  Import of ozone depleting substances specified at Appendix F shall be 
subject to the policy/quota allocations to be laid down by the Ministry of 
Climate Change from time to time  
Acetic anhydride  Importable by concerned industrial consumers after obtaining NOC from 
the Ministry of Narcotics Control. However, the quantity to be imported 
by industrial consumers will be determined by the FBR and for the 
concerned Pharmaceutical Units, by the Ministry of Health.  
Provided that acetone, hydrochloric acid and sulphuric acid appearing 
against Sr. Nos. 32, 35 and 38 shall also be importable by the Research 
Laboratories both in public or private sector & educational institutions 
subject to NOC from the Minist ry of Narcotics Control; Provided further 
that commercial importers shall also be allowed to import acetone, 
anthranilic acid, ethyl ether, hydrochloric acid and sulphuric acid 
appearing against Serial Nos.  32, 33, 34, 35 and 38 below, subject to 
NOC and q uota determination by the Ministry of Narcotic Control.  
N-Aceylanthranilic acid  -do- 
Isosafrole  -do- 
Ephedrine  -do- 
Ergometrine  -do- 
Ergotamine  -do- 
Lysergic acid  -do- 
3-4-Methylenedionyphenyl -2-propanone  -do- 
Norephedrine  -do- 
1-Phenyl -2-propanone  -do- 
Piperonal  -do- 
Pseudoephedrine  -do- 
Safrole  -do- 
Acetone  -do- 
Anthranilic acid  -do- 
Ethyl ether  -do- 
Hydrochloric acid  -do- 
Phenylacctic acid  -do- 
Piperidine  -do- 
Sulphuric acid  -do- 
Potassium permanganate  Importable by industrial consumer, pharmaceutical units and 
commercial importers subject to NOC by the Ministry of Narcotics 
Control  
Toluene  -do- 
Formaldehyde  Import shall be allowed only to industrial consumers who have valid 
license issued by the environmental agency/dept. concerned under the 
Pakistan Environmental Protection Act, 1997  
All narcotic drugs and psychotropic substances, 
except items on Banned List  Importable only by those pharmaceutical units having valid drugs 
manufacturing licence o n the authorization of Ministry of Health. Such 
imports shall however be subject to meeting the conditions prescribed for 
imports of pharmaceutical raw materials vide S.No.7 of Part II of Appendix 
B 
Human blood and its fractions  Consignment shall be released on production of AIDs and hepatitis B & C 
free certificate  
Contaminated blood samples for laboratory test  Importable on the recommendation of Ministry of Health subject to 
following conditions:  
the importing laboratory is dul y approved by Ministry of Health prior to 
import of contaminated blood samples;  
the laboratories have qualified staff and state of the art equipment to 
ensure:  
a) bio safety of lab environment  
b) safety of waste disposal; and  
the importing laboratory compl ies with the procedure prescribed by 
Ministry of Health, for import, handling and waste disposal of 
contaminated blood samples  WT/TPR/S/424 • Pakistan  
 
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  Commodity description  Conditions  
Food colours  Food colours as specified vide Annex B -2 shall be allowed subject to 
production of certificate from the Government of the exporting country 
that it is in use or registered in that country, and carrying fair and true 
labelling  
Food colour lakes, prepared from colours of 
heading No.  3204.9000  -do- 
Dyes Importable subject to certificate from the suppliers that the dyes are 
neither based on benzidine, nor contain any contents thereof  
Explosives  Department of Explosives of Ministry of Industries shall allow import of 
explosives only on the production of NOC by the importers from the 
Defence Production Division  
Fireworks  Import shall be allowed subject to compulsory physical examination by 
the ex plosives experts and that Department of Explosives, Ministry of 
Industries shall allow import only to the applicants and companies 
having valid licences under the Explosive Rules, 2010  
Insecticides, rodenticides, fungicides, herbicides, 
anti-sprouting pro ducts, disinfectants and similar 
products, excluding plants growth regulators, put 
up in forms or packing for retail sale or as 
preparation, or articles (for example sulphur, 
treated bands, wicks and candles and fly -papers)  Importable in accordance with th e provisions of the Agricultural 
Pesticides Ordinance, 1971 (II of 1971), as amended from time to time, 
and the rules made there under, and those drugs which are registered 
under the Drugs Act, 1976 (XXXI of 1976), and the rules made there 
under  
Waste, pa rings and scrap of Plastics, excluding 
hospital waste of all kind, used sewerage pipes 
and used chemical containers falling under their 
respective PCT codes (Sr. No.  26 of Appendix A 
refers)   Importable by industrial consumers subject to the fulfilment of following 
conditions:  
(i) certification confirming appropriate manufacturing facility and 
determination of import quota from concerned Federal/Provincial 
Environmental Protection Agency;  
(ii) inspection from technically qualified designated Pre -Shipment 
Inspection companies to be notified by the Federal government 
from time to time that the imported consignment does not contain 
any hazardous waste, as defined in the Basel Convention  
Granules made by the recycling of plastics waste  Importable subject to c ertification from the exporting country that the 
granules being exported are free from hazardous substance as defined in 
Basel Convention. Customs Authorities shall ensure strict compliance of the 
condition  
Used or refurbished cryogenic containers  Import shall be allowed only by the industrial consumers or users 
subject to the following conditions:  
(i) refurbished prior to shipment;  
(ii) inspected by notified independent certifying body that such 
containers or cylinders are compliant with international safety 
stand ards;  
(iii) such containers or cylinders shall not be older than 10 years  
Used or refurbished cylinders (for liquefied gas) for 
use in motor vehicles only  Production of safety certificate from the Department of Explosives  
Passport printers, visa printers, laminators and 
laminate rolls  Import of the following types of passport printers, visa printers, 
laminators and laminate rolls shall be allowed only by Directorate 
General Immigration and Passports:  
(i) Diletta 330i, 400i & 500i (Passport Printer s) 
(ii) Diletta RL 90, CPL90, PL 90 (Passport Visa Printers)  
(iii) Diletta (Laminators)  
(iv) Advantage Make (Laminate Rolls)  
Steam and vapour generating boilers (other than 
central heating hot water boilers capable also of 
producing low pressure steam) and super -heated 
water boilers  Importable subject to prior approval of the Chief Inspector of Boilers  
Provided that used boilers will also be allowed to be imported subject to 
the following conditions:  
(i) certification by any of the prescribed PSI companies as listed at 
paragraph 5 subparagraph (6) for safety and remaining life of at least 10 
years; and  
(ii) production of certificate from Chief Inspector of boilers  
Machinery for arms and ammunition, high 
explosives, Radioactive substances, security  
printing, currency and mint  Import shall be allowed to only such industrial units as have been duly 
sanctioned by the relevant Government agency  
Mobile handsets and tablets  Import shall be subject to the type approved by Pakistan 
Telecommunication Authority (PTA) and production of Certificate of 
Clearance (CoC) issued by PTA after ensuring that the handset has a 
valid GSMA IMEI etc. and white listed in the Device Identification 
Registration & Blocking System (DRIBS).  
Transmission apparatus whether or not 
incorporating reception apparatus, (excluding 
fax machines and mobile phones) TV 
transmission antenna system, field pick -up units 
STL equipment, VHF set, TV modulator and 
demodulator, video projection systems and 
video switching sy stem Importable by PTV, concerned public sector agencies, and others licensed 
by the Federal Government. Companies having agreement with the 
concerned Government agencies for supply of cellular and mobile phone 
facility may also import this equipment  WT/TPR/S/424 • Pakistan  
 
- 148 - 
 
  Commodity description  Conditions  
Waste and scrap of exhausted batteries of 
automobiles  Import of such scrap shall be allowed only in favour of industrial 
consumers only for their own use subject to the condition that importer 
shall furnish to Customs Authorities:  
(a) a certificate from the c oncerned Federal or Provincial Environment 
Protection Agency that they have adequate manufacturing facility capable 
of handling hazardous wastes in accordance with the provision of Basel 
Convention; and  
(b) permission or authorization specifying quantitati ve entitlement for the 
import of waste and scrap of electric accumulators issued by the or 
concerned Federal/Provincial Environment Protection Agency  
Armoured security vans, (new or second hand)  Importable by banks and security companies for their own use, subject to 
special number plates to be obtained from the concerned provincial 
authorities  
Non-sterilized surgical needles and syringes  Importable only by the industrial units duly registered with the 
concerned Federal or Provincial public health agen cy, for further 
processing of these goods into value added, final and finished products  
Active ingredients for formulation/manufacturing 
of pesticides  Importable by industrial users only  
Arms and ammunition  Importable only by individual licence holders o r arms dealership licence 
holders to whom licence is granted by; (i) Provincial Home Department, 
in case of dealers located in that Province; or (ii) Ministry of Interior, in 
case of dealers located in Islamabad Capital Territory; (b) A licence 
holder unde r condition (a) shall also have certificate from Original 
Equipment Manufacturer (OEM) in case of imported from an OEM, 
otherwise a certificate from any of the prescribed PSI companies as 
listed in Appendix H of IPO 2016, specifically mentioning, (i) weapo n's 
nomenclature; (ii) weapon's caliber or bore or gauge; and (iii) weapon's 
manufacturer's logo, weapon's serial number embossed thereon and 
other related information; and (c) The weapon shall be importable only 
through air and sea ports.  
Air pistols, th eir parts and slugs  Importable by Pakistan Sports Boards, Provincial Sports Boards, National 
Rifle Association, Rifle Associations of armed forces and recognized or 
specialized sporting clubs, subject to the procedure to be notified by the 
Federal Governm ent 
Barrel blanks for recoilless rifles, guns and 
mortars, and other parts and accessories of arms  Importable by units authorized to manufacture arms  
Parts and accessories of arms and ammunition 
non-prohibited bores  Importable, irrespective of import status, by duly sanctioned export 
oriented units for manufacturing of arms and ammunition meant for 100% 
export. Customs Authorities will ensure that all requirements for 
manufacture -cum-export are met  
Sporting ammunition  (i) registration or affili ation with the relevant authorities  
(ii) endorsement of their requirement by:  
National Rifle Association of Pakistan (NRAP);  
Administrator of the Gun Club Islamabad; and  
Respective Armed Forces Headquarters in case of sportsmen of the Armed 
Forces; and  
(iii) import will be affected directly and shall be subject to a maximum limit 
of the 35,000 cartridges or bullets per year  
All equipment used for reception, broadcast and 
distribution of satellite signals pertaining to the 
field of electronic media such as satellite dishes, 
decoders receivers, digital satellite news 
gathering (DSNG), encoder, modulator, high 
power amplifier (HPA), integrated digital 
receiver (IRD), broadband global access network 
(B-GAN), LNA (low noise amplifier), LNB (low 
noise block), camera with satellite transmission 
Facility, digital head end, etc.  Import shall be allowed into the country only after obtaining specific 
permission/NOC  from the Pakistan Electronic Media Regulatory 
Authority (PEMRA)  
Toys for infant   Importable subject to certification from the exporting countries that the 
toys imported shall be in accordance with the international standards 
and are free from hazardous; toxic elements  
Auto pilot kits  Import shall be allowed only in favour of authorized 
agencies/departments subject to NOC from Ministry of Defence  
Air Vehicles with HD Camera & high speed WIFI 
Transmission capability and Night Vision Goggle  Import shall b e allowed subject to prior NOC from the Ministry of 
Defence.  
3D Printers  Import shall only be allowed with prior permission from the Ministry of 
Interior.  
Mercury and Mercury Compound  Import shall be allowed in favour of industrial consumers having vali d 
environmental approval from the concerned Federal/Provincial 
Environmental Protection Agency/Department.  
Meat Importable subject to sanitary requirements of Animal Quarantine 
Department of Ministry of National Food Security and Research.  
Processed Food  Importable subject to the quality standards specified by the Pakistan 
Standards and Quality Control Authority.  
-do- Ditto.  
Source:  Ministry of Commerce, Import Policy Order 2020.   WT/TPR/S/424 • Pakistan  
 
- 149 - 
 
  Table A3. 4 List of items not imp ortable in used/second -hand condition, 2015 -21 
Description  
Boilers (excluding used boilers subject to prior approval of the Chief Inspector of Boilers provided such used 
boilers are certified by any of the prescribed PSI companies as listed at Appendix H for safety and remaining 
life of at least 10 years)  
Compressors  
Air conditioners  
Refrigerators  
Hand tools (hand operated/power driven) by commercial importers  
Household type and other miscellaneous machinery, items/articles and parts thereof  
Machinery parts except the following:  
i) machinery parts and components by industrial units  
ii) second -hand/reconditioned parts of the plant, machinery and equipment by construction, mining 
and petroleum sector companies (paragraph 10(ii) refers)  
iii) overhauled aircraft engines and parts (Sr. No.  31 of Part II of Appendix B)  
Sugar plants, cement plants, oil refinery, chemical plants, thermal power plants, hydel power plants, cranes, 
road rollers and machine tools, manufactured locally as provided in r elevant Customs General Order, as 
amended from time to time, except static road rollers below 10 tonnes and above 12 tonnes capacity not 
more than 10 years old  
Machinery falling under PCT codes specified in Government of Pakistan, Import  Policy Order, Sr.  No. 9, 
column 3 shall not be importable in second -hand or used condition. The ban shall however not apply on all 
kinds of computer -related equipment in second hand or used condition falling under their respective PCT 
headings notwithstanding their inclusi on in that column  
Vehicles of Chapter 87 (including likewise chassis of used automotive vehicles cut into minimum of two 
pieces whether or not described as steel scrap) except the following:  
i) Dumpers designed for off highway use in CBU condition having payload capacity exceeding 5 tonnes 
subject to pre -shipment inspection in the exporting country from any of the internationally 
recognized pre -shipment inspection companies listed at Appendix H to the effect that such dumpers 
are (a) compliant with Euro-II equivalent or higher omission standards as notified by Pakistan 
Standard and Quality Control Authority (b) manufactured as such by original equipment 
manufacture  
ii) bullet proof vehicles (See Sr. No.  22 of Part II of Appendix B)  
iii) armoured security vans  HS No. (8710.0010 & 8710.0090), (See Sr. No.  59 of Part I of Appendix B).  
iv) Spraying lorries or sprinklers (8705.9000), shall be allowed subject to certification by any of the 
recognized pre -shipment company listed at Appendix H to the effect that the said lorries are (a) 
compliant with Euro -II equivalent or higher emission standards as notified by Pakistan Standard and 
Quality Control Authority(b) in accordance with the original manufacturer specifications and (c) not 
older than five years.  
v) A limited number  of vehicles imported in completely built -up (CBU) condition by the Export 
Processing Zones (EPZs) investors under special permission granted to the industrial undertaking in 
the Export Processing Zones (EPZs) in terms of CBR's U.O No.  1980-81, CUS -EX/5(17 ), dated 
11 April 1982, read with Customs General Order No.  1/83, dated 9  January  1983, shall be allowed to 
be disposed of in tariff area after five years of their import and usage by the importing industrial 
undertakings on payment of leviable duties and taxes in accordance with law.  
vi) Automatic specialized mobile trolleys in wet processing textile industry (8705.9000)  
vii) Mobile cranes/lorries (8705.1000) by industrial units subject to certification by the competent 
Authority of exporting country or a recognized pre -shipment company listed at Appendix H to the 
effect that said machinery/transport equipment (a) is compliant with Euro -II emission standards or 
not older than 10 years, and (b) is in good working condition/has a remaining productive life o f five 
years  
viii) Mobile clinics (See Sr. No.  27 of Part II of Appendix B)  
ix) Motorized wheelchairs (8713.0000)  
x) Prime movers (See Sr. No.  28 of Part II of Appendix B)  
xi) Waste disposal trucks (8704.2299, 8704.2390) (See Sr. No.  24 of Part II of Appendix B)  
xii) Fire-fighting vehicles (8705.3000) (See Sr. No.  25 of Part II of Appendix B)  
xiii) Ambulances (See Sr. No.  23 of Part II of Appendix B)  
xiv) Buses (87.02) not older than three years with seating capacity of 40 or above, subject to the 
condition that such buses shall be certifi ed by a pre -shipment inspection company, as listed in 
Appendix H, to the effect that such buses have a road -worthiness of at least five years from the 
date of importation. The formula for determining the age of vehicles provided in the procedure for 
import  of vehicles (Appendix E) shall be equally applicable in determining the age of buses  
Auto parts (including serviceable auto parts imported as steel scrap)  
Apparatus and appliances  
Source:  Ministry of Commerce, Import Policy Order 202  
  
  WT/TPR/S/424 • Pakistan  
 
- 150 - Table A4. 1 Pakistan's air services agreements, 2021  
Partner  Date of 
signing/ Initialing  5th a 7th b Cabotagec Coopd Designatione Withholdingf Pricingg Capacityh Stati 
Afghanistan  1957 (s)/1994 (i)  Y N N N S SOEC  DA OR Y 
Albania  1972 (s)  .. N N .. .. .. .. .. .. 
Algeria  1976 (i)  Y N N N S SOEC  DA PD Y 
Australia  1998 (s)/2007 (i)  Y N N N M SOEC  DD PD Y 
Austria  1971 (s)  Y N N N S SOEC  DA PD Y 
Azerbaijan  1993 (i)  .. N N .. .. .. .. .. .. 
Bahrain, Kingdom of  2014 (s)/1972 (i)  N N N N S SOEC  DA PD Y 
Bangladesh  2011 (i)  .. N N .. .. .. .. .. .. 
Belarus  2016 (s)  .. N N .. .. .. .. .. .. 
Belgium  1958 (s)  Y N N N S SOEC  DA PD Y 
Bosnia  2007 (s)  .. N N .. .. .. .. .. .. 
Botswana  1989 (i)  .. N N .. .. .. .. .. .. 
Brunei Darussalam  1987 (s)  Y N N N S SOEC  DA PD Y 
Bulgaria  2015 (i)  N Y N Y M SOEC  FP PD Y 
Canada  1996 (s) Y N N N M SOEC  DA PD Y 
Chad 1975 (i)  .. N N .. .. .. .. .. .. 
China  2009 (i)  Y N N N S SOEC  DA PD Y 
Cyprus  2003 (i)  .. N N .. .. .. .. .. .. 
Czech  Republic  1967 (s)/2014 (i)  .. N N .. .. .. .. .. .. 
Denmark  1999 (i)  Y N N N S SOEC  DA OR Y 
Egypt  1970 (s)  Y N N N M SOEC  DA OR Y 
Eritrea  2006 (s)  .. N N .. .. .. .. .. .. 
Ethiopia  1952 (s)  Y N N N S SOEC  DA OR Y 
France  1950 (s)  Y N N N M SOEC  DA OR Y 
Georgia  1996 (i)  .. N N .. .. .. .. .. .. 
Germany  1960 (s)  Y N N N S SOEC  DA PD Y 
Ghana  1975 (i)  Y N N N S SOEC  DA PD Y 
Greece  2010 (i)  .. N N .. .. .. .. .. .. 
Hong Kong, China  1998 (s)  N N N N M SOEC  DA PD Y 
Hungary  1977 (s)  Y N N N S SOEC  DA PD Y 
India 1976 (s)  N N N N S SOEC  DA PD Y 
Indonesia  1966 (s)  .. N N .. .. .. .. .. .. 
Iran, Islamic Republic of  1999 (s)  Y N N N M SOEC  DA B1 Y 
Iraq 1950 (s)  Y N N N M SOEC  DA OR Y 
Italy 1957 (s)  Y N N N S SOEC  DA OR Y 
Ivory Coast  1975 (i)  .. N N .. .. .. .. .. .. 
Japan  1962 (s)  N N N N S SOEC  DA PD Y 
Jordan  2007 (i)  .. N N .. .. .. .. .. .. 
Kazakhstan  1993 (s)  .. N N .. .. .. .. .. .. 
Kenya  1979 (s)  Y N N N S SOEC  DA PD Y 
Korea (DPR)  1975 (s)  Y N N N S N/A DA PD Y  
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signing/ Initialing  5th a 7th b Cabotagec Coopd Designatione Withholdingf Pricingg Capacityh Stati 
Korea, Republic of  1996 (s)  .. N N .. .. .. .. .. .. 
Kuwait, State of  1986 (s)/2016 (i)  N N N Y S SOEC  DA PD N 
Kyrgyz  Republic  1993 (s)  N N N N S SOEC  DA PD Y 
Latvia  2011 (i)  .. N N .. .. .. .. .. .. 
Lebanon  1964 (s)  Y N N N M SOEC  DA PD Y 
Liberia  1979 (s)  .. N N .. .. .. .. .. .. 
Libya 1973 (i)  .. N N .. .. .. .. .. .. 
Luxembourg  1997 (i)  .. N N .. .. .. .. .. .. 
Macao, China  1995 (i)  Y N N N S PPoB DA PD Y 
Malaysia  1973 (s)  .. N N .. .. .. .. .. .. 
Maldives  1981 (i)  Y N N N S SOEC  DA PD Y 
Malta  2016 (s)  N N N Y M SOEC  FP PD Y 
Mauritius  1979 (s)  Y N N N S SOEC  DA PD Y 
Morocco  2015 (i)  Y N N Y M SOEC  FP PD N 
Mauritania  1979 (i)  .. N N .. .. .. .. .. .. 
Myanmar  1971 (s)  Y N N N S SOEC  DA PD Y 
Nepal  1976 (s)  Y N N N S SOEC  DA PD Y 
Netherlands  2014 (i)  Y N N N S SOEC  DA PD Y 
New Zealand  2015 (i)  Y N N Y M SOEC  FP PD N 
Niger  1976 (i)  Y N N N S SOEC  DA PD Y 
Nigeria  1976 (i)  .. N N .. .. .. .. .. .. 
Norway  1999 (i)  Y N N N S SOEC  DA OR Y 
Oman  1972 (i)  N N N N S SOEC  DA PD Y 
Philippines  1949 (s)  Y N N N S SOEC  DA OR Y 
Poland  1970 (s)  Y N N N S SOEC  DA PD Y 
Portugal  1958 (s)  Y N N N S SOEC  DA OR Y 
Qatar  2015 (i)  Y N N Y M SOEC  FP PD Y 
Romania  1973 (s)  Y N N N S SOEC  DA PD Y 
Russian  Federation  1993 (i)  Y N N N S SOEC  DA PD Y 
Saudi Arabia, Kingdom of  1972 (s)/2015 (i)  N N N Y M SOEC  DA PD N 
Seychelles  1979 (s)/1976 (i)  .. N N .. .. .. .. .. .. 
Serbia  2015 (i)  N N N Y M SOEC  FP PD Y 
Sierra  Leone  1978 (s)  .. N N .. .. .. .. .. .. 
Singapore  2009 (i)  Y N N N M SOEC  DA B1 Y 
Somalia  1976 (i)  .. N N .. .. .. .. .. .. 
South  Africa  1999 (s)  .. N N .. .. .. .. .. .. 
Spain  2008 (i)  Y N N N S SOEC  DA PD Y 
Sri Lanka  1949 (s)  Y N N N S SOEC  DA OR Y 
Sudan  1975 (s)  N N N N S SOEC  DA PD Y 
Sweden  1999 (i)  Y N N N S SOEC  DA OR Y 
Switzerland  2000 (i)  Y N N N S SOEC  DA OR Y 
Syria 2010 (s)  .. N N .. .. .. .. .. .. 
Tajikistan  1992 (s)/2009 (i)  .. N N .. .. .. .. .. .. 
Tanzania  1982 (i)  .. N N .. .. .. .. .. ..  
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Thailand  1969 (s)  Y N N N M SOEC  DA PD Y 
Tunisia  2001 (s)  .. N N .. .. .. .. .. .. 
Turkey  1973 (s)  Y N N N M SOEC  DA OR Y 
Turkmenistan  1993 (s)  .. N N .. .. .. .. .. .. 
Uganda  1978 (i)  .. N N .. .. .. .. .. .. 
Ukraine  1993 (s)  .. N N .. .. .. .. .. .. 
United Arab Emirates  2015 (i)  For Pak  N N Y M SOEC  FP PD Y 
United Kingdom  2010 (s)  N N N N M SOEC  DD B1 Y 
United  States  1996 (i)  Y N N N M SOEC  FP FD N 
Uzbekistan  1992 (s)  N N N N S SOEC  N/A N/A N 
Viet Nam 2015 (i)  N N N Y M SOEC  FP PD Y 
Yemen  2005 (s)  .. N N .. .. .. .. .. .. 
Zimbabwe  1989 (i)  .. N N .. .. .. .. .. .. 
.. Not available.  
a Fifth freedom rights.  
b Seventh freedom rights.  
c Cabotage rights.  
d Clauses on cooperation between airlines e.g. code -sharing.  
e Designation: single by an "S", multiple by an "M".  
f Type of withholding clause: SOEC – Substantial Ownership and Effective Control, PPoB – Principal Place of Business, N/A – not available.  
g Type of pricin g clause: DA – Double Approval, DD – Double Disapproval, CoO – Country of Origin, ZP – Zone Pricing, FP – Free Pricing, N/A – not available.  
h Type of capacity clause: PD – Pre-Determination, B1 – Bermuda I, FD – Free Determination, O – other, N/A – not av ailable.  
i If an exchange of statistics is foreseen by the agreement.  
Source:  Information provided by the authorities.  
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