Containing Imports Table 17.6: Effective Rate of Import Duty by Commodity Group, 2019-20(Rs in Billion) Chapter Description 87 Vehicles Import Dutiable Value Import % Customs Duty Effective Revenue Rate% 290 269 93 81.5 28.0 27 Mineral Fuels 2180 1580 72 79.4 3.6 72 Iron and Steel 458 393 86 47.2 10.3 84 Machinery 725 407 56 42.5 5.9 85 Semiconductor Devices 502 210 42 42.2 8.4 15 Vegetable Oils 278 275 99 31.7 11.4 39 Plastics& Articles 321 291 91 25.5 7.9 48 Paper& Paperboard 79 73 92 15.1 19.1 73 Articles of Iron& Steel 115 71 62 13.2 11.5 09 Coffee, Tea and Spices 100 97 97 12.0 12.0 29 Organic Chemicals 354 166 47 11.9 3.4 69 Ceramic Products 24 23 96 11.5 47.9 TOTAL OF ABOVE 5426 3855 413 7.6 OTHERS 2074 1199 289 13.9 TOTAL 7500 5054 702 9.4 Source: FBR year book The policy must be to withdraw the regulatory duties and opt for a statutory tariff regime with somewhat higher rates. In this connection it will be useful to make a comparison of the average import tariff in major South Asian countries. This is done in Table 17.7. Table 17.7: Import Tariffs and Tariff Equivalent of Import Restrictions Agriculture Manufacturing Total Tariff Equivalent* Bangladesh 13.4 17.5 14.0 n.a. India 60.7 8.0 10.3 13.4 Nepal 13.8 13.7 13.7 14.6 Pakistan 8.0 10.5 10.2 7.5 Sri Lanka 30.5 17.4 19.0 6.1 *of various trade restrictions like quotas Source: WTO, World Tariff Profiles| World Bank (%) Overall Total Effective Tariff n.a. 23.7 28.3 17.7 25.1 The surprising finding is that Pakistan has the most liberal import policy among South Asian countries, especially on agricultural items. It is not surprising, therefore, that the marginal propensity to import is higher in Pakistan. 171