ISLAMABAD: Pakistan’s duty-free imports have surged by around 16% during fiscal year 2023-24, according to data released by the Federal Board of Revenue (FBR).
The FBR said that the duty-free imports increased to Rs7.30 trillion in the fiscal year 2023-24 as compared with Rs6.29 trillion in the preceding fiscal year.
According to official data, the surge highlights the rising dependency on critical goods and industrial inputs that enjoy duty-free status under trade and tariff policies.
The data shows that mineral fuels, mineral oils, and related products (Chapter 27) dominated the duty-free import basket. These imports stood at Rs1.48 trillion in 2023-24, reflecting a growth of 4% over the previous year and accounting for 20% of total duty-free imports. Despite a marginal drop in share compared to last year’s 23%, fuels remain the single largest component of free imports.
Organic chemicals (Chapter 29) followed as the second major contributor, with imports amounting to Rs645.50 billion, up 13.8% from the previous year. This category maintained a steady 9% share in both years, underlining the importance of chemicals in Pakistan’s industrial and pharmaceutical sectors.
A significant jump was observed in iron and steel (Chapter 72) imports, which climbed 21.6% to Rs634.34 billion, raising its share from 8% to 9%. Even more striking was the increase in photosensitive semiconductor devices (Chapter 85), which surged 174.3% to Rs1.37 trillion, making up 19% of total duty-free imports compared to just 8% last year. This sharp rise reflects the growing demand for electronic components and technology-driven industries.
Conversely, some sectors experienced a decline. Cotton (Chapter 52) imports dropped by 63.9%, falling from Rs424.21 billion to Rs153.20 billion, reducing its share from 7% to just 2%. Similarly, pharmaceutical products (Chapter 30) contracted by 23.1%, while edible vegetables and roots (Chapter 7) also slipped by 8.5%.
Other categories showed mixed results. Cereals (Chapter 10) recorded a 14.9% increase, while plastics and related articles (Chapter 39) jumped 23.6%. Fertilizer imports rose by 35.9%, reflecting agricultural needs, while inorganic chemicals (Chapter 28) declined marginally by 0.5%.
In total, the top 15 tariff categories accounted for Rs6.37 trillion, representing 87% of Pakistan’s duty-free imports, consistent with the previous year. The “others” category rose by 10.9% to Rs921.34 billion, maintaining a 13% share.
The consistent growth in duty-free imports underscores Pakistan’s reliance on critical industrial inputs, fuels, and high-tech components that are exempt from customs duty.
Analysts suggest this trend, while easing production costs, also points toward vulnerabilities in the trade balance, as a large share of imports continues to enter the country without duty imposition.
