In a bid to curb the import bill and encourage local manufacturing, the federal government has proposed a 2% increase in customs duty on a broad range of imported goods in the Budget 2025–26, according to official documents released Friday.
The revised rates raise customs duties from 3% to 5% on several critical product categories, targeting both industrial raw materials and consumer goods.
Key Categories Affected:
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Natural Gas: Customs duty proposed to increase from 0% to 5%.
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Mineral Oil & Energy Inputs: Including coal, water gas, and electrical energy now face higher tariffs.
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Electronics: Duty raised on LED circuits, energy-saving lamps, tube lights, and base caps.
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Construction & Hardware: Items such as passenger lifts, locks, and latches will now be taxed at 5%.
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Metals: A 2% duty hike on PCM-coated metal sheets, re-rolled metal, and steel sheets.
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Clothing & Footwear: Increased duties on used clothes, shoes, and bags.
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Textile Inputs: Custom duties on imported yarns (single and multi-folded) increased by 2%.
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Chemicals: Hikes on unbleached chemicals, pharmaceutical and cosmetic additives, colorants, and wood-preserving oils.
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Vehicle Industry: Raw materials used in manufacturing buses and trucks are now more expensive.
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Advertising Materials: Duty on trade catalogs and promotional materials has also been raised to 5%.
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The Finance Ministry states the move is intended to promote import substitution, bolster domestic industries, and address the widening trade deficit. Analysts believe these changes could have mixed effects, potentially increasing the cost of goods but reducing pressure on foreign exchange reserves.
Industry Response
Manufacturers have expressed concern over the increased cost of production, while some economists have welcomed the step as a push toward self-reliance and fiscal discipline.
