Pakistan is finalising its first-ever medium-term industrial policy through consultations with key ministries, regulatory bodies, local and international experts and private sector platforms.

The policy aims to reverse the trend of deindustrialisation and raise the manufacturing sector’s share in the GDP from the current 18 per cent to 26pc by 2035. Notably, this target merely restores the level last recorded in 1996, when manufacturing contributed 26pc to the national economy.

Alarmed by the negative 1.7pc growth in large-scale manufacturing during FY25, policymakers are grappling with the sector’s persistent decline. In contrast, small and medium-sized enterprises have shown more resilience, maintaining a stable year-on-year growth of around 9pc, except in FY20 when it fell to just 1.3pc, likely due to the pandemic shock. Pakistan’s export performance in the region also remains dismal. On a graph of per capita exports, Pakistan ranks at the bottom, lagging behind Bangladesh, India and Vietnam.

Concerned by the sector’s underperformance and its declining share in GDP, the government has decided to take a deeper look, assessing the situation, identifying barriers, engaging the business community and formulating a comprehensive strategy not just to revive the sector but to lay the groundwork for sustained growth by addressing all impediments to capital flow.

According to official sources in Islamabad, the government is actively considering amendments to key laws and regulations, including the Securities and Exchange Commission of........

© Dawn Business