New Delhi, Jan 25 (NationPress) The tariff statistics for Pakistan during FY25-FY26 highlight a government in a tug-of-war between reformist aspirations and protective instincts, grappling with a significant lack of policy discipline, according to a report.

The report published in The News International indicates that Pakistan's tariff framework narrates a tale more profound than the typical yearly adjustments in customs duties.

“The data reveals a stark clash between two opposing economic ideologies, playing out in real time,” it elaborates.

For many years, Pakistan's manufacturing sector has been constrained not by a shortage of entrepreneurial talent or industrial aspirations, but by the exorbitant costs of inputs.

Furthermore, the report highlights that raw materials, intermediate goods, and industrial components have consistently been taxed at rates that render local production pricier than importing finished goods.

This distorted tariff structure has penalized value addition and favored trading over manufacturing.

The data for FY25–FY26 appears to signal a welcome departure from that tradition.

However, “this is merely half of the narrative and regrettably, the less problematic portion.”

“While the foundation of the tariff pyramid is being liberalized, the apex is becoming increasingly rigid, elevated, and more distorting. In numerous high-value sectors, such as automobiles (especially CBU imports), ceramics, home appliances, and rubber products like tyres, the tariff burden remains unchanged or has even increased,” the article reports.

For instance, the effective protection on auto CBUs has escalated from approximately 81 percent to nearly 88 percent.

This adjustment is not trivial but rather a “reinforcement of one of the most protective regimes in the region.”

Moreover, the export ramifications of this policy combination are particularly concerning.

“Shielded domestic markets create a formidable disincentive to export. Why would a firm endeavor to secure a 5.0 percent margin in Europe, where stringent standards and cutthroat competition prevail, when it can comfortably achieve a 25 or 30 percent margin in Lahore under tariff protection?” the report contends.

This reasoning has been a recurring theme in Pakistan's industrial narrative.

Sectors that were intended to be ‘infant industries’ many years ago have aged behind protection yet have failed to evolve into globally competitive enterprises.

The core structural flaw, the article asserts, is that Pakistan continues to utilize tariff policy as a replacement for industrial policy.

Countries that successfully navigated the infant industry phase did so with discipline, not indulgence.

“In contrast, protection in Pakistan has been open-ended and unconditional. Industries are shielded not because they are becoming competitive, but because they are politically entrenched,” the report concludes.