Govt cautioned: ‘Dumping of imported goods to destroy local ceramic industry’
ISLAMABAD: The ceramic tiles and glass industries cautioned the government on Saturday that massive reduction of import duties under the second phase of tariff rationalization policy in the budget (2026-27) would result in total closure of the local manufacturers.
It has come to the notice of domestic producers that the Regulatory Duty (RD) would be reduced by 20 percent and Additional Customs Duty (ACD) by 50 percent on the import of tiles under phase-II of the tariff rationalization plan.
On Saturday, Chairman of the National Assembly Standing Committee on Finance Naveed Qamar also raised the issue before the Finance Committee and sought clarification from the Ministry of Commerce and National Tariff Commission (NTC) about the impact of tariff rationalization on the domestic industries. Domestic industries have cautioned of total closure following huge reduction in RDs and ACDs at the import stage. How the government would tackle the situation of serious implications of Phase-II of massive reduction in import duties on items being manufactured by domestic sectors, asked Naveed Qamar.
Industry representatives, while reacting to the budget proposals, warned that the decision could severely undermine the competitiveness of local manufacturers already operating under significant cost disadvantages.
In a communication to the Ministry of Finance and Ministry of Commerce, domestic manufacturers stated that they had earlier urged policymakers to maintain the existing tariff structure until domestic manufacturers were provided a genuine level playing field vis-à-vis regional competitors. They noted that despite repeated representations, the budget has moved in the opposite direction without addressing the fundamental issues affecting industrial competitiveness.
According to industry sources, Pakistan’s ceramic tile sector is currently operating at nearly 50 percent of its installed capacity due to prolonged economic slowdown, depressed construction activity, exceptionally high energy costs, and expensive financing. Manufacturers contend that local production costs remain substantially higher than those of competing countries, particularly China and India, where industries benefit from lower energy prices, larger economies of scale, and more supportive business environments.
Industry stakeholders emphasized that the sector has never sought special treatment or protection. Rather, it has consistently advocated for the removal of structural disadvantages that make local production less competitive. They pointed out that high electricity tariffs, gas prices, financing costs, taxation, and compliance expenses continue to erode the competitiveness of Pakistani manufacturers.
The industry warned that reducing RD and ACD before addressing these cost distortions would encourage a larger influx of heavily dumped imported finished tiles into the local market. Such imports, often produced at significantly lower costs, would further displace domestic production, suppress capacity utilization, discourage fresh investment, and threaten existing employment in the sector.
Representatives argued that sustainable competition can only emerge when competitors operate under broadly comparable conditions. They maintained that asking local manufacturers to compete with dumped imported products while bearing substantially higher costs amounted to creating an uneven playing field rather than promoting fair competition.
Industry leaders stressed that Pakistan’s long-term economic interests required strengthening of domestic manufacturing rather than increasing dependence on imported finished products.
The industry has urged the government to immediately review the proposed reductions in RD and ACD applicable to imported finished tiles and to engage with the stakeholders before implementing measures that could have far-reaching consequences for domestic manufacturing.
The stakeholders expressed their hope that the policymakers would recognize the strategic importance of the ceramic tile and glass sectors and adopt measures aimed at reducing the cost of doing business, rationalizing energy prices, improving access to finance, and ensuring a genuine level playing field for domestic manufacturers.
Industry representatives of glass sector cautioned that unless structural cost disadvantages were addressed first, the proposed reductions in RD and ACD might accelerate deindustrialization, weaken local manufacturing capacity, and jeopardize thousands of jobs linked directly and indirectly to Pakistan’s ceramic tile industry.
Copyright Business Recorder, 2026