ISLAMABAD: The Federal Board of Revenue (FBR) has reported a sharp rise in duty-free imports during fiscal year 2024-25, highlighting changing trade trends and the growing use of tax exemptions for key imported goods in Pakistan.
According to the FBR Year Book 2024-25, released on Tuesday, the total value of duty-free imports increased by 15 percent to Rs8.38 trillion in FY2024-25, compared to Rs7.29 trillion in FY2023-24.
The latest figures indicate a substantial increase in imports benefiting from customs and tax exemptions, particularly in major commodity groups linked to energy, industry, and healthcare.
The report shows that the top 15 imported items accounted for Rs8.01 trillion worth of duty-free imports in FY2024-25, up significantly from Rs6.14 trillion in the previous fiscal year. This represents a strong 30.5 percent increase, reflecting higher import volumes in a few dominant sectors.
Among these categories, mineral fuels, mineral oils, and related products emerged as the largest segment of duty-free imports. Their value surged to Rs2.83 trillion in FY2024-25, compared to Rs1.48 trillion a year earlier, posting a massive 91.5 percent increase. This sharp rise suggests increased import reliance on energy-related products and petroleum-linked commodities.
Imports of photosensitive semiconductor devices, one of Pakistan’s major exempt import categories, remained largely unchanged during the year. Their value stood at Rs1.372 trillion, showing only a slight 0.1 percent decline from the previous fiscal year.
A particularly notable increase was recorded in duty-free cotton imports, which jumped by 185 percent to Rs436.72 billion in FY2024-25, compared to Rs153.20 billion in FY2023-24. The spike points to stronger demand from Pakistan’s textile sector, which continues to rely heavily on imported raw materials to sustain production and exports.
Meanwhile, pharmaceutical imports under the duty-free regime also posted steady growth.
According to the FBR data, these imports rose by 18 percent to Rs161.64 billion, up from Rs137 billion in the previous year, reflecting continued demand for medicines and health-related products.
However, the report also reveals a contrasting trend outside the major exempt categories. Duty-free imports beyond the top 15 items declined sharply by 68 percent, falling to Rs368 billion in FY2024-25 from Rs1.15 trillion in FY2023-24. This indicates that the overall increase in exempt imports was concentrated in a limited number of high-value sectors rather than being broad-based across the import basket.
Economic analysts believe the increase in duty-free imports reflects a combination of targeted fiscal incentives, sector-specific exemptions, and rising dependence on essential industrial and energy inputs.
At the same time, the trend may also trigger concerns over its impact on government revenue collection, import dependency, and Pakistan’s trade balance.
The latest FBR figures suggest that while tax exemptions continue to support strategic sectors such as energy, textiles, electronics, and pharmaceuticals, the growing volume of duty-free imports could become an important policy issue in future budget and tariff discussions.
