Lawmakers meeting at the Senate Standing Committee on Commerce on Monday said they were hopeful that the State Bank of Pakistan’s policy rate could fall to single digits by June 2026, stressing that persistently high interest rates have made it difficult for businesses to operate and secure financing.
The committee received a briefing from Federal Minister for Commerce Jam Kamal Khan, who said nearly 95 percent of Pakistan’s business community does not have access to formal credit. He explained that high interest rates have pushed investors to keep their money in banks instead of investing in productive sectors, as returns of around 18.1 percent remain highly attractive.
The minister told lawmakers that the government’s ability to offer relief is limited under the International Monetary Fund (IMF) program. He said the IMF requires equal treatment across sectors and discourages targeted incentives, while also raising objections to special economic zones. According to him, subsidies are only allowed when they are clearly tied to increased revenues.
Jam Kamal Khan emphasized the need to support small and medium enterprises (SMEs), noting that Pakistan’s export industries depend heavily on imported raw materials. He said recent relief measures and announcements by the prime minister were intended to support exports and reduce pressure on industry. He added that the infrastructure cess could be reduced or scrapped altogether, with discussions already held with provincial governments. The committee also recommended lowering income tax rates to ease the burden on businesses.
During the meeting, members were informed that Pakistan’s bilateral trade with Iran currently stands at $3.12 billion, including imports worth $2.42 billion and exports of over $700 million. Committee members expressed strong frustration over the failure to implement a Statutory Regulatory Order (SRO) aimed at facilitating trade with Iran, accusing the Federal Board of Revenue (FBR) of creating obstacles.
Senator Saleem Mandviwala said the SRO took a year to prepare but remains stalled due to resistance from the FBR. Lawmakers called for FBR Chairman Rashid Mahmood Langrial to be summoned to explain the delays, warning that overly aggressive enforcement could further hurt businesses and industrial activity.
Officials from the Ministry of Commerce also shared that memorandums of understanding worth $100 million were signed at the recent Pakistan-Iran Business Forum in Tehran. While petroleum trade with Iran remains banned, they said trade in other products, including rice and quinoa, has increased. However, the absence of formal banking channels continues to be a major hurdle.
