Contraband steel threatens local industry

Sector urges govt to place checks

KARACHI:

Large steel producers of the nation have said that smuggled steel from Afghanistan and Iran was destroying the domestic industry.

In a letter written to the Federal Board of Revenue Member Customs Operations Syed Muhammad Tariq Huda, Pakistan Association of Large Steel Producers (PALSP) General Secretary Syed Wajid Bukhari stated that contraband steel was denting the earnings of local steel producers.

“Persistent and organised smuggling is battering the economy of our country,” added Bukhari.

He was of the view that if the problem was not addressed in a timely manner, then no amount of loans from international lenders would be able to rescue the country’s economy.

He pointed out that contraband steel bars were openly sold in Wana, Mir Ali, Miran Shah, Bannu, DI Khan and Karak at prices ranging from Rs138,000 to Rs150,000 per ton.

He highlighted that the international price of steel bars stood at $772 and importing them to Pakistan costed an additional $40 in freight. He added that the commodity was subject to many other duties and taxes that added up to 71% of the cost.

“It is estimated that around 50,000 tons of steel has been smuggled in the last couple of months which caused a loss worth Rs4.8 billion to the national exchequer,” he said.

Employers Federation of Pakistan (EFP) President Ismail Suttar termed it unfortunate that Pakistan failed to protect its local industry.

He highlighted that the recent sales tax exemption granted to the steel producers in the Federally Administered Tribal Area (FATA) and Provincially Administered Tribal Area (PATA) region had already dealt a blow to the sector.

Smuggled steel from Iran, on top of the recent sales tax exemption, will destroy the industry further, he said.

Arif Habib Commodities CEO Ahsan Mehanti emphasised upon placing checks on smuggling and urged the government to cooperate in this regard.

Karachi Iron and Steel Merchants Association (KISMA) Chairman Shamoon Bakir Ali said that steel bars were highly prone to smuggling in Pakistan.

Published in The Express Tribune, February 22^nd, 2022.

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