Steel Industry Requests PM to Stop Smuggling of Steel from Iran and Afghanistan

The steel industry has requested Prime Minister Shehbaz Sharif to stop the devastation of the local steel industry due to the smuggling of approximately 500,000 MT of steel from Iran and Afghanistan. The steel industry in its letter stated that large-scale smuggling of steel from Iran and Afghanistan, coupled with some other factors, is destroying the local steel industry. The industry is already fighting on many fronts for its survival and facing a very challenging situation due to massive currency depreciation, high financing costs as well as the massive increase in the cost of different inputs. The production activity has been halted due to a shortage of raw materials and many mills are working on a small fraction of their capacity. This situation has worsened to smuggling which continues unabated and is being done in an organized manner, the letter said. This is resulting in devastation for the local steel industry and at the same time causing huge revenue loss to the national exchequer. The letter said that according to an estimate, approximately 500,000 MT steel is being smuggled from these two countries annually to Pakistan which is approximately 10 percent of the total steel being produced in the country. It further highlighted that according to a conservative estimate, this results in a revenue loss of around 25 billion rupees to the national exchequer annually. The industry said that smuggling has wiped out the local steel industry in Quetta and most other parts of Balochistan. Over 80 percent of steel that is sold in Balochistan is coming from Iran through smuggling as well as through misdeclaration, under-invoicing, and other deviant tactics. The industry said that this ‘organized crime’, coupled with the state of the economy, is pushing Pakistan towards de-industrialization. Due to loose controls, the smuggled steel is not confined to Balochistan and is now available in cities like Lahore and Karachi. The letter said that in the past, the industry suggested to the government that the import of steel should be allowed only through sea routes. This would help in effectively countering the threat posed by smuggling.