Pakistan's steel industry urges PM, army chief to declare sector 'strategic'

Pakistan's largest steel producers have appealed to the country's top military and civilian leadership to formally recognize the domestic steel sector as a strategic industry, warning that without urgent intervention the sector risks further decline at a time of rising regional tensions.

The Pakistan Association of Large Steel Producers wrote to Chief of Army Staff Field Marshal Asim Munir and Prime Minister Shehbaz Sharif, arguing that countries with self-reliant industrial capacity are better positioned to withstand periods of conflict.

The association cited the Israel-US war on Iran and broader regional instability as evidence that steel production has become inseparable from national security.

PALSP Chairman Javaid Iqbal Malik said steel is "the backbone of any sovereign economy" and called on the government to match its strategic importance with formal policy recognition.

A sector under strain

Despite significant investment in capacity expansion and modern technology over the past decade, the association said the industry has suffered heavy losses in recent years.

Scrap imports fell by nearly 50% across fiscal years 2023, 2024, and 2025 as construction activity weakened. High borrowing costs, expensive electricity, and currency depreciation compounded the pressure, leaving the industry operating at roughly half its potential.

The association said the drop in power consumption has also worsened Pakistan's capacity payment burden, as electricity contracted from independent power producers goes unused.

PALSP cited a World Bank report that it said positions Pakistan's steel sector as having among the lowest emission rates globally, describing the industry as a responsible industrial player deserving of government support.

Industry’s demands

The association proposed a package of measures to revive the sector, including formal strategic industry status, tax cuts, stricter enforcement against tax evasion, lower policy interest rates, and incentives for construction and infrastructure development.

It also called for globally competitive electricity tariffs for steel manufacturers, arguing that lower power rates could help the industry double its annual electricity consumption from 4 billion units to 8 billion units — reducing capacity payment costs for the broader economy in the process.

The group acknowledged recent government measures, including the Apna Ghar housing scheme and reductions in borrowing and power costs announced in the current fiscal year, as steps in the right direction. The letter was also copied to the deputy prime minister, finance minister, and State Bank of Pakistan governor