In a significant move welcomed by the business community, the Pakistani government has finalized a comprehensive 10-year industrial policy aimed at reversing the alarming decades-long decline of the sector. The policy, finalized after months of detailed discussions, directly addresses the industrial sector’s plummeting contribution to the national GDP, which has fallen sharply from 26 percent in 1996 to just 18 percent in 2025. Acting on Prime Minister Shehbaz Sharif’s directive for the Ministry of Industries and Production to review and reshape the sector, eight high-powered sub-committees were formed to craft recommendations. These proposals were presented and finalized during a high-level meeting with the Special Assistant to the Prime Minister (SAPM) on Industries and Production, Haroon Akhtar Khan, marking the beginning of the implementation phase.
The long-term policy, designed to remain valid for a decade with mandatory progress reviews involving stakeholders every 18 months, outlines a multi-pronged strategy. Key measures include a significant reduction in corporate tax, proposed to be lowered progressively from the current 29 percent to 26 percent over the next three years to enhance competitiveness. Recognizing the critical role of smaller businesses, the government pledges improved credit access for small and medium enterprises (SMEs) and the distressed segment, alongside a dedicated push to revive “sick” industrial units, with banks encouraged to provide loans and advised to use forecasting tools for early detection of struggling industries. To create a more conducive business environment, the policy mandates special amendments to various laws, including the Corporate Rehabilitation Act 2018, the SECP Act, the Anti-Money Laundering Act, and the Income Tax Ordinance, focusing on investor security, promoting localisation, and overall ease of doing business. Industrial unit classification standards have also been determined in consultation with the Pakistan Banking Association.
SAPM Haroon Akhtar Khan underscored the urgency of the initiative, stating, “The decline from 26 percent to 18 percent industrial GDP contribution is unsustainable. Our focus is sharp: boost exports, develop import substitutes, and create a genuinely enabling environment.” To ensure swift execution, he announced the formation of 10 new implementation sub-committees and instructed them to deliver tangible results within just one week. He commended the original eight committees for their exceptional performance in finalizing the recommendations within a short timeframe, confirming that the finalized plan has been presented to and appreciated by Prime Minister Shehbaz Sharif. Haroon Akhtar Khan expressed strong confidence in the policy’s potential, stating, “This policy is comprehensive and holds the potential to usher in an industrial revolution in Pakistan.” The government now moves decisively to implement this decade-long framework, betting on it to rebuild the country’s industrial base and drive much-needed economic stability.
