Local steel industry under threat due to smuggling through Pak-Afghan border

Despite tall claims of documenting and monitoring imports and exports at Pak-Afghan border, the smuggling of steel from the neighboring country continues unabated. 

The local steel industry, through a letter sent to Federal Board of Revenue (FBR) on February 18, 2022 has informed that smuggled steel bars of non-Pakistani origin are openly available in Wana, Mir Ali, Miran Shah, Bannu, DI Khan and Karak. The steel bars are abundantly available in the cities near Angoor Adda-custom border post at very low prices, indicating that smuggling is occurring either through the custom border post or in a location near the area.

As per the letter sent to FBR, Pakistan Association of Large Steel Producers (PALSP), the industry is facing a new threat of smuggling of steel from the Afghan border which is destroying the domestic steel industry. Now, the smuggling of steel from Iran is also taking place.

The steel bars are available at prices ranging from Rs138,000 to Rs150,000 in these cities whereas the international price of steel bars is $772 (plus freight of $40) and it is subject to the duties and taxes of 71 per cent that is Rs97,675/-. Hence, the landed price of non-Pakistani origin should be Rs242,373/-.  

It is estimated that around 50,000 tons of steel has been smuggled in the last couple of months, amounting to a revenue loss of PKR 4.8 Billion to the national exchequer.

“We are outreaching you to draw your kind attention towards the threat posed by smuggling of steel from the Afghan border which is destroying the domestic steel industry of the country,” Wajid Bukhari of PALSP said in the letter.

A sustained and organized smuggling for a long time is throttling the economy of our country. Until and unless we as a nation are able to stop this threat, no amount of loans from international lenders will be able to rescue our country’s economy.

The Pak-Afghan border was fenced to curb terrorism as well as the menace of smuggling of goods. If we are unable to stop the smuggling, it will not only be a loss to national exchequer but it will also render a great blow to the economy and especially the steel sector; resulting in joblessness and a major dent to the investment of the country.