The federal government has finalised a long-awaited 10-year industrial policy after extensive consultations with the industrial and business communities.

Prime Minister Shehbaz Sharif has directed the Ministry of Industries and Production to revise the existing industrial policy, especially in light of the industrial sector’s declining contribution to GDP, from 26% in 1996 to just 18% in 2025.

In response, the Ministry established eight high-level sub-committees to formulate revival strategies. These committees presented their recommendations to the Special Assistant to the Prime Minister (SAPM) on Industries and Production, Haroon Akhtar Khan, during a high-level meeting on Friday.

The proposed policy will span a decade, with progress evaluations scheduled every 18 months. It aims to strengthen support for small and medium enterprises (SMEs) and struggling businesses by improving access to credit and restoring non-operational industrial units. Legal amendments will also be introduced to foster a business-friendly environment and encourage investment and localisation.

The sub-committees’ recommendations have marked the beginning of the policy’s implementation phase.

Haroon Akhtar Khan, addressing the meeting, emphasised the urgent need to revive the sector by boosting exports and promoting import substitution to stabilise the economy.

Key measures include the State Bank of Pakistan issuing guidelines to revive sick industries and manage debt resolution.

Amendments to the Corporate Rehabilitation Act, 2018, have been proposed, and banks are being encouraged to adopt data forecasting tools to identify early signs of industrial distress.

Industrial unit classifications were finalised with input from the Pakistan Banking Association.

To further incentivise manufacturing, the policy suggests gradually reducing the corporate tax rate from 29% to 26% over three years.

Moreover, proposed changes also target laws including the SECP Act, the Anti-Money Laundering Act, and the Income Tax Ordinance.

To ensure timely execution, SAPM Khan has set up 10 new implementation sub-committees and tasked them with delivering tangible outcomes within a week. He hailed the policy as comprehensive, with the potential to spark an industrial revival in Pakistan.

Khan noted that the recommendations have been submitted to Prime Minister Shehbaz Sharif, who praised their efforts.