The federal government is preparing to introduce a major tariff relief package in the upcoming FY2026-27 budget, aimed at lowering the cost of imported raw materials and industrial inputs for local manufacturers.
The proposed measures are part of the National Tariff Policy 2025-30 and are expected to provide approximately Rs. 200 billion in relief to businesses across multiple sectors.
Under the proposal, Additional Customs Duty (ACD) will be reduced or eliminated on thousands of tariff lines used in manufacturing. The government plans to abolish the 2 percent ACD on 518 tariff lines currently subject to a 15 percent customs duty.
Additionally, the 4 percent ACD imposed on 2,166 tariff lines with a 20 percent customs duty will be reduced to 2 percent. For 465 tariff lines where customs duties exceed 20 percent, the 6 percent ACD will be lowered to 4 percent.
In total, ACD reductions will apply to 3,149 tariff lines, primarily covering industrial raw materials, intermediate goods, and other manufacturing inputs.
The government is also considering significant cuts to Regulatory Duties (RD). Under the plan, the maximum RD rate would be reduced from 50 percent to 20 percent across nearly 1,948 tariff lines, with average duty rates expected to decline by around 20 percent.
Industries likely to benefit from the reforms include textiles, engineering, chemicals, plastics, iron and steel, pharmaceuticals, auto parts, batteries, and other export-focused sectors.
Officials believe the tariff reductions will help manufacturers lower production costs, improve operational efficiency, and enhance the global competitiveness of Pakistani products.
The initiative forms part of a broader strategy to gradually phase out Additional Customs Duties over four years and Regulatory Duties over five years. The National Tariff Policy 2025-30 also seeks to simplify the tariff regime, encourage industrial efficiency, and support export-led economic growth.
If approved, the package is expected to provide much-needed relief to industries facing rising input costs while strengthening Pakistan’s position in international markets.
