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Business Recorder
15-07-2025
- Business
- Business Recorder
MoC unveils NTP to narrow trade deficit
ISLAMABAD: The Ministry of Commerce (MoC) has unveiled its National Tariff Policy (NTP) 2025–30, already approved as part of the federal budget. The policy aims to stimulate export growth of 10–14%, while imports are expected to grow by 5–6% — a slower pace intended to narrow the trade deficit. To establish a benchmark for tariff rationalization that is both transparent and comparable, the policy takes into account existing tariff structures in regional economies. The NTP 2025–30 targets a simple average tariff rate of 9.7% by FY 2029–30, implying a more than 20% annual reduction in the first two years, followed by a 5–10% annual reduction in the subsequent years. PM orders urgent overhaul of National Tariff Commission The NTP 2025-30 sets a target of achieving a simple average tariff of 9.70% by the terminal year 2029-30. This corresponds to about more than 20% annual decline in the first two years and a 5-10% annual decrease in subsequent years. This will be done by taking a comprehensive approach that encompasses (1) Readjustment of CD slabs to 4 slabs (0%,5%,10%, &15%) from the existing 5 slabs in 5 years (2) Reduction in CD to a maximum of 15% in 5 years (3) Elimination of RDs in 5 years (4) Elimination of ACDs in 4 years and (5) Phasing out of 5th Schedule in 5 years The reduction in tariff rates will bring the trade weighted average from the current 10.6% to below 6% in a period of 5 years. The current tariff structure follows a cascading principle. There are 5 slabs i.e.0, 3, 11, 16, and 20 with some peaks and specific rates. The uneven spread in tariff slabs or tariff escalation not only inhibits industrialization but also diversification. To simplify tariff structure and remove uneven spread between tariff slabs, in the first year, the current tariff slabs of 0%, 3%, 11%, 16% and 20% will be adjusted as 0%, 5%, 10%, 15% and 20%. Peaks in tariffs above 20%, mainly in the auto sector, will also be reduced gradually. Over the last 15 years, ACD and RD in addition to Customs Duty (CD) have been used as a tool for revenue enhancement. As a result, the number of products subject to ACD and RD has increased manifold. Out of a total of 7,589 tariff lines, around 7,476 tariff lines are subject to ACDs, and 1,996 tariff lines have been subject to RDs. Excessive use of Additional Customs Duties (ACDs) and Regulatory Duties (RDs) in addition to already high Customs Duties (CDs) has not just made the tariff structure high, complex, and protective but unfair, non-transparent, and prone to elite capture. All ACDs will be eliminated gradually in the next 4 years. Few products at 35% CD are subject to Auto sector policy (AIDEP 2021-26), therefore, the auto sector ACDs will be eliminated gradually from July 1, 2026. RDs are mostly serving the purpose of raising revenues and providing extra protection to already protected industries. Moreover, the ad-hoc imposition of RDs over time has resulted in overall discriminatory tariffs, which is evident from high dispersion in RD rates on similar products. First, the RD rates will be harmonized as lowest on raw material, moderate on intermediate and capital goods and highest on consumer goods and will be placed in slabs of 0%, 5%, 10%, 15%, 20%, 30%, 40% and 50%. Moving forward, the following schedule will be followed to eliminate RDs in 5 years. The rates are indicative and actual RD rates will be adjusted in the same range (indicated against each year) by the Tariff Policy Board and the government on year-to year basis. The existing RDs slabs will be completely eliminated in 5 years, keeping in view the annual targets for reduction in RD rates. The 5th Schedule of the Customs Tariff provides concessions or exemptions to certain domestic industries. Starting from a few products in 2013, the number of products claiming concessions or exemptions under the 5th schedule has increased manifold during the last few years. It consists of a long list of products divided into different parts. In FY 2023-24 the 5th Schedule consists of eight parts, each part contains different tables for different types of products. However, what makes the 5th Schedule more complex is the various conditions attached to the listed products. The product specific conditions under the 5th schedule require a wide range of documentation and paperwork. This not only gives huge discretionary powers to EDB and IOCO but also increases cost of compliance. Moreover, as most of the concessions are available only to specific manufacturers, these conditions are seen as restrictive and biased towards large businesses and manufacturers. Small businesses that cannot incur costs for attaining certificates or approvals and related paperwork have to purchase inputs from commercial importers that import at MFN rates. The tariff structure under the Fifth Schedule is different from general tariff structure. There are two ways in which tariffs under the Fifth Schedule are different from the general tariff structure. First, the 5th Schedule has custom duty rates beyond the slabs applicable to the 1st Schedule. Second, most of the products in the schedule are exempt from Regulatory Duty (RD) and Additional Custom Duty (ACD) that are otherwise applied in the 1st Schedule of Customs Act, 1969. Resultantly, as the number of exemptions and concessions under the 5th Schedule has increased over the years, its burden on the federal exchequer is also growing exponentially. The largest portion of customs duty expenditure for FY 2022-23 is given under Fifth Schedule amounting PKR 190.688 billion registering a growth of 10.24% compared to 2021-22. In view of distortions in tariff structure created by the 5th Schedule, all the products/tariff lines will transition from 5th Schedule to 1st Schedule in next 4-5 years in a phased manner. In this process some concessions will be withdrawn, and some concessions will be generalized (made available to all: (i) the products that have virtually no concession under the 5th Schedule shall be transferred to the 1st Schedule;(ii) products with concessionary rates will be transferred to the 1st Schedule either under MFN rate or under the slab closest to the concessionary rate; (iii) products that have specific conditions because there is no product-specific tariff heading in the 1st t Schedule will be moved to the 1st Schedule by creating a new tariff heading; (iv) products falling under the tariff heading 'others' will be transferred from the 5th Schedule to 1st Schedule by creating separate headings with the description as given in the 5th Schedule; and ( v) Minimally used concessions will be withdrawn. In line with the principles and objectives of this policy, the auto sector tariffs will also be rationalized to enhance competitiveness, productivity and consumer welfare including removing any quantitative restrictions on import of old/used vehicles subject to quality and environmental standards and differential tariff structure. The Auto Industry Development and Export Policy (AIDEP) 2021-26 is valid till June 2026 and the new auto policy will be introduced from first July 2026 where a substantial reduction on duties related to the auto sector will be carried out including review of SRO 655 (I)/2006 dated 22-Jun-2006, SRO 656(I)/2006 dated 22- Jun-2006, SRO 693 (I)/2006 dated 1-Jul-2006, elimination of all ACDs and RDs and reduction in the CD rates. Various models including Macro model, Export Forecasting Model, Global Trade Analysis Project (GTAP) Model import tariff revenues show a loss of about PKR 500 billion in static calculations however, considering all other factors ie, increased demand, economic growth, transparency, decrease in under invoicing, smuggling, compliance cost etc., GTAP calculations indicate a positive impact on revenues (7-9%). The major impact of tariff reforms will be on exports. GTAP calculations show that exports will increase by (10-14%); imports will also increase (by 5-6%) but at a slower rate than the increase in exports thereby improving the trade deficit. Resources will move to more efficient and productive sectors as production in export-oriented sectors will pick up. Industry will grow, net employment will increase, and investment will strengthen. Reduced tariffs would not only allow the availability of cheap raw materials and intermediate but would also be a key factor in reducing the imported inflation, especially for food products. Copyright Business Recorder, 2025
Time of India
05-05-2025
- Health
- Time of India
Union minister inaugurates north India's first technology-driven cancer laboratory
Gurugram: Union minister Jitendra Singh has inaugurated north India's first technology-driven cancer diagnostics laboratory that will lower radiation exposure by 60 per cent and ensure safer and faster scans while delivering high-resolution images. Mahajan Imaging and Labs developed the next-generation digital PET-CT scanners with AI-powered imaging . "As someone who has served both in the medical field and public service, I understand the pivotal role that early and accurate diagnosis plays in the battle against cancer. The introduction of advanced digital PET-CT technology in north India marks more than a technological achievement, it is a beacon of hope for countless families," Singh said after inaugurating the system on Saturday. According to a statement, the Artificial Intelligence (AI) powered 128 Slice Digital PET CT- Omni Legend scanner has the industry's best spatial resolution of 1.4 mm enabling early cancer detection and accurate staging. With the most advanced digital detector and other features such as Precision DL, AI-based lesion identification, and 60 per cent lower radiation exposure, the system ensures safer, faster scans while delivering high-resolution images. "It exemplifies how we are leveraging innovation with empathy to build a healthier, more equitable future for our citizens The Central government recognises the cancer burden and has taken serious measures to ensure access to cancer care by setting up 200 Day Care Cancer Centres in district hospitals this year besides full Customs Duty exemption on 36 cancer, rare and chronic diseases," Singh said. Dr Harsh Mahajan, Founder and Chairman, Mahajan Imaging and Labs, shared his thoughts and said, "The launch of our new 128 Slice Digital PET-CT scanner in Gurugram marks a major leap forward in delivering technology-driven cancer diagnostics." "With next-generation digital PET-CT scanners, AI-powered imaging, and integrated pathology support, we are empowering clinicians with the precision tools needed for early, accurate detection and better treatment outcomes," Mahajan said. In India, cancer remains a significant public health challenge, with over 14.9 lakh new cases estimated in 2023 according to the Indian Council of Medical Research (ICMR). The crude incidence rate stands at about 100 cases per one lakh population. Concerningly, projections indicate that cancer incidence will further increase to 1.57 million new diagnoses by 2025, representing a 12.8 per cent rise compared to 2020, he added.
