Pakistan to introduce first-ever Industrial Policy to boost investment and modernise legal framework

The federal government is set to unveil Pakistan’s first-ever Industrial Policy, focusing on attracting investment, modernising infrastructure, and streamlining regulatory frameworks. 

According to a report by The News, key elements of the policy include the establishment of a National Land Bank and provisions to facilitate the return of offshore capital, particularly from overseas Pakistanis.

However, the implementation of these measures is contingent on approval from the International Monetary Fund (IMF), with plans for a capital reinvestment framework under consideration. 

This framework will allow overseas Pakistanis and domestic investors to legally channel offshore capital, provided it does not originate from countries on the Financial Action Task Force (FATF) grey or black lists. It may also include the issuance of Industrial Bonds for infrastructure and industrial clusters to offer a secure and liquid investment route.

The policy also proposes modernising Pakistan’s legal framework for insolvency. Key reforms include updating the Corporate Rehabilitation Act 2018 and Corporate Restructuring Act 2016 to provide restructuring opportunities for viable businesses and introduce a statutory court-ordered moratorium on creditor actions during the restructuring process. 

These reforms aim to offer breathing space for businesses, especially small and medium-sized enterprises (SMEs), to restructure and continue operations without the immediate threat of liquidation.

Another significant aspect of the policy is the creation of a National Land Bank, which will consolidate land for industrial estates. This initiative, supported by the Special Investment Facilitation Council (SIFC), aims to provide robust land-lease options to manufacturers. Additionally, the policy proposes reforms to Special Economic Zones (SEZs) and Export Processing Zones (EPZs), including the use of land from Pakistan Steel Mills (PSM) to boost export output.

One-stop shops (OSSs) in SEZs and industrial estates, which have faced operational challenges, will be digitalised to improve efficiency. The policy calls for the integration of services across federal and provincial agencies to reduce delays in land allotment, utility connections, and regulatory approvals.

To facilitate the growth of industries, the policy also aims to harmonise zoning laws, improve land leasing frameworks, and enhance connectivity by paving roads between industrial parks and major motorways.