Islamabad, Pakistan (CU)_ According to the latest panel discussion, Pakistan imports $14 billion worth of chemicals annually, which accounts for approximately 18 percent of the country’s total imports and ranks second after fuel imports. The panel also called for measures to develop a standard chemical industry policy that could facilitate import substitution through domestic production.
During the second day of the meeting at Pakistan’s first chemical expo in Lahore, Zafar Mehmood, CEO of the Nimir group of companies, said, “There is a need for a policy to support local production of chemicals as it would lead to savings of foreign exchange”. According to Mehmood, the total imports for the eleven months from July to May 2022 amounted to $72 billion, which is expected to reach approximately $80 billion for the entire year. He also added that the chemical industry touches 96% of all industries and noted the need to utilize local raw materials.
According to Jahangir Piracha, the head of the Pakistan Chemical Manufacturers Association (PCMA), Pakistan requires guidance for import substitution for chemicals, as they include everything from active pharmaceutical ingredients (APIs) to fertilizers. According to Anjum Nisar, chairman of ATS Group of Industries, the sector will only develop when investments are made and when the nation makes use of its unique indigenous resources.
The panel claimed that the primary problem with the entire structure was a lack of value addition; therefore, they advised that imports be classified as imports for basic consumption, imports for local value addition, and imports for exports. It was noted that imports for exports should be facilitated, and that the government should prioritize industrialization over trade with 5- to 10-year programs.
The panel also questioned why exports were not expanding at the same rate as imports, suggesting that the high cost of utilities makes local firms uncompetitive. According to the panelists, “Cost of doing business is ever increasing and conventional ways of exports along with limited value addition are hampering exports”.
