The Competition Commission of Pakistan (CCP) has issued a note for the Pakistani federal government recommending it to reduce the 15 percent regulatory duty on imported steel billets to create a level playing field in the market for end steel products, particularly high quality steel bars used in infrastructure development projects.
In the domestic steel industry, there are large-scale integrated steel manufacturing units that produce their own steel billets and convert them into steel bars, and non-integrated re-rolling mills that rely on local and imported steel billets to make steel bars.
According to the CCP, the imposition of the existing regulatory duty on the import of steel billets has disturbed the cascading nature of the tariff structure previously introduced by the federal government, effectively putting non-integrated re-rolling mills at a competitive disadvantage vis-a-vis the integrated steel manufacturing units. The disproportionate duty structure in the steel industry is creating barriers to expansion for the existing re-rolling mills and barriers to entry for potential aspirants in this growing market, the CCP stated.