KARACHI: Large steel producers anticipate an annual loss of Rs25 billion in tax revenues and foreign exchange reserves due to the unabated arrival of smuggled steel bars from Afghanistan and Iran into Pakistan.

“The unchecked smuggling operations have been responsible for funnelling approximately 500,000 tonnes of steel annually from the neighbouring countries,” Pakistan Association of Large Steel Producers (PALSP) Secretary General Wajid Bukhari said in a statement.

The smuggling crisis has dealt a heavy blow to the domestic steel industry, particularly in Balochistan. The region’s steel industry has been severely compromised, with smuggled, non-taxed Iranian billets flooding the markets of major cities, undercutting local producers. The absence of weighing bridges and scanning facilities at border checkpoints in Balochistan has emboldened smuggling networks. Allegations of official patronage and corruption further deepen concerns, he said.

Illegal arrival of steel from neighbouring countries is pushing Pakistan’s economy to the brink of disaster, prompting urgent calls for action to save the domestic steel industry and safeguard the nation’s future, he added.

The authorities concerned are not taking concrete measures to halt the menace of smuggling despite repeated frantic appeals to the authorities concerned by PALSP, he said, adding that ignoring this threat will have severe repercussions for our present and future.

Mr Bukhari said the smuggling crisis is eroding the rule of law and accountability and there is a need for comprehensive measures, including restricting steel imports to sea routes, enhanced surveillance, digitalisation, and stringent penalties for complicity remains crucial.

Published in Dawn, September 1st, 2023