In a strategic move aimed at accelerating the development of Export Processing Zones (EPZs) and achieving ambitious export targets, the Pakistani government has taken a momentous step by permitting the import of construction material from tariff areas into EPZs in the northern region and all future EPZs. This groundbreaking policy will facilitate transactions in the local currency, expediting progress and creating an environment conducive to optimal export growth.
Sources confirmed that this progressive decision will greatly benefit EPZs in the northern region, including Sialkot, Gujranwala, and Risalpur. However, the import privilege will be limited to locally manufactured or produced construction materials, presenting an opportunity for the domestic construction material industry to flourish.
The proposal to allow import of construction material into EPZs was recently presented by the Industries and Production Division to the Economic Coordination Committee (ECC) of the Cabinet during a momentous meeting. Recognizing the potential to stimulate commercial activities within EPZs and significantly enhance exports, the ECC approved the initiative with certain stipulations.
Since the establishment of the Export Processing Zones Authority (EPZA) in 1980 and the inception of the first EPZ in Karachi in 1981, infrastructure development within EPZs has relied heavily on imported construction material due to its unavailability in the country. This necessitated complex procedures, hindering progress. The recent policy shift seeks to address these challenges by emphasizing the use of locally produced construction materials like iron, steel, cement, and ceramics, promoting sustainable economic growth and conserving foreign exchange reserves.
The push for amendments in relevant regulations was initiated following a request from the Sialkot Chamber of Commerce & Industry (SCCI) to the prime minister in 2022. The SCCI sought ease of doing business and greater facilitation for the entry of construction materials into the Sialkot EPZ to minimize foreign exchange exposure. After consultations and discussions with stakeholders, necessary amendments were proposed in the relevant clauses of the regulations.
The amendments, outlined in draft notifications, will enable the import of construction material from tariff areas into EPZs in the northern region, including Sialkot, Gujranwala, and Risalpur, as well as into all future EPZs. Transactions will be conducted in the local currency, further boosting domestic economic activities.
Despite differing opinions from stakeholders, the ECC granted approval for the amendments, signifying a crucial step towards supporting the domestic construction material industry and fostering economic resilience and sustainable growth. By promoting locally manufactured products and encouraging investments within the country, the government’s decision reflects a commitment to strengthen the foundations of Pakistan’s economy and enhance its global economic standing. The move is expected to have a positive impact on the nation’s overall export performance, further establishing Pakistan’s position on the international economic stage.