It is a member of the South Asian Association for Regional Cooperation (SAARC)
Pakistan has signed Bilateral Investment Treaties (BITs) with nearly 40 countries. It has also signed ‘Double Taxation Agreements’ with nearly 50 countries.
The country has signed a trade agreement with 21 other countries in the São Paulo Round of the Global System of Trade Preferences among Developing Countries (GSTP).
Moreover the government reserves the power to grant sector-specific duty exemptions, concessions, and protections under Statutory Regulatory Orders (SROs), though the use of SROs has decreased during recent years.
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Government of Pakistan allows duty-free import of samples (not for commercial use) provided a bank guarantee or indemnity bond is provided to Customs to ensure that the items will be returned.
The same is applicable to the re-export of goods; but with a minimum value-addition of 2.5% over their FOB price.
The Pakistani consumer is very price sensitive and consumption levels of households generally come down with rise in prices. Although some Pakistani consumers are aware of quality differences and insist on world-class products, majority of the customers can sacrifice quality concerns for price reductions.
The quality of after-sales service plays an important role while making a purchase decision. To retain customer loyalty, companies are increasingly focusing on after-sales service.
In case of durable and non-consumer items, many consumers prefer to have a complete turnkey package which includes installation, operational training, and onsite guarantee.
Pakistani consumers are now becoming more and more brand conscious. This trend is generating demand for some products that were previously unfamiliar, particularly in sectors like apparel and household consumer durable items.
Moreover, improvement in country’s economy has resulted into an increase in purchasing power and an expansion of the middle class.
However one should know that there is a small section of the country population (less than 5%) which belongs to elite section of the society; consisting mainly of landlords, politicians, and government officials. They are the biggest consumers of luxury goods imported into the country.
There is not yet any chain of stores in Pakistan, though the situation may change soon. Quite recently the concept of garment chain stores was introduced, whereby many such chains have started selling locally manufactured garments mainly in the large cities like Karachi and Lahore.
The segment of wholesale distribution is quite well-developed in Pakistan. It consists of around 1,000 - 1,500 wholesalers. Karachi is the main hub for wholesale distribution of goods.
Moreover there are a dozen shopping malls in the country, mainly located in Karachi and Lahore.
By Road: The road transport network in Pakistan is relatively outdated (built before 1947 during the British Raj), although new motorways are now being constructed. However it is relatively easy to transport goods by road from one place to another within the country.
By sea: The port of Karachi is the most important and the busiest port in the country. It is administered by Karachi Port Trust (KPT). Other ports include ports of Qasima and that of Gwadar. The Pakistani ports have a strategic location in connecting Central Asian countries and the Gulf countries.
By air: Only those foreign air transport companies which have signed an agreement with Pakistani authorities are authorized to work with or in Pakistan. The Pakistani airports belong to the public sector. The airports of Karachi, Lahore and Islamabad have considerable international activity.
The automotive industry is one of the emerging industries in Pakistan. There are around 20 automobile/motorcycle manufacturing units in assembling operations.
Further to the privatization of the cement plants, and the recent boom in the construction industry, cement manufacturing is performing very well.
The pharmaceutical sector with a large presence of the main international corporations is a major player now in the country.
The leather goods industry and, to a limited extent, the metal surgical instruments sector, mostly based in Sialkot, are impressive exporters.
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Last Updates: October 2014